How Long Does It Take To Get Mortgage Loan Approval?

How long does it take once your loan gets sent to underwriting to get an official approval?

3 Answers

In a perfect world, it should only take a couple of days from the time an underwriter receives a file to issue what you refer to as an "official approval." What you are really asking about, though, is referred to in the business as an " unconditional commitment," which is the lender's way of saying, "You've answered all our questions. Your application meets all the requirements for the mortgage program you've applied for. We're loaning you the money." Needless to say, for an underwriter to issue an unconditional commitment within a couple of days after receiving the file is a rare event indeed. Instead, the typical initial response given by a lender after a file gets submitted called a "conditional commitment." This is a lender's way of saying "You've met requirements A through M for the loan; now, show us the documents to show us that you meet requirements N through Z and we'll lend you the money."

At this point you're probably thinking, "That's odd, why wouldn't they do everything at once?" Well, there are lots of reasons -- some of them innocuous, some of them not. Part of it stems from the fact that most lenders do not require a complete file to get the underwriting ball rolling. In a purchase transaction, the title commitment and appraisal are usually not available right away. The underwriter can still review the available documentation and issue the conditional commitment while these items are in the works. Sometimes borrowers don't have all of the necessary income or asset documentation when they sign the application papers. In other instances, the documentation submitted requires some kind of clarification. Suffice it to say that any number of circumstances can result in a lender issuing a conditional commitment as opposed to an unconditional one. As a result, there is really no way of telling how long it could take between the time an underwriter issues a conditional commitment and the time the underwriter issues the "official approval," as you put it. It really depends on the nature of the needed information and the time it takes for the borrower or the loan officer to get their hands on it.

Beyond all of that, there are any number of external factors that could negatively affect the time it takes to get an unconditional loan commitment. For instance, a sudden drop in interest rates could lead to a deluge of refinance applications. As a result, lenders would probably be short on staff and applications would take longer than usual to process until such time as they were able to hire enough people to handle the workload. Another example might be a temporary increase in applications due to impending "guideline tightening." Recently, for example, mortgage insurance companies announced that they would no longer issue mortgage insurance for loans on condominiums in "declining markets" with loan-to-value ratios of more than 90% after a certain. As a result, lots of people with only 5% to put down on purchases "got off the fence," so to speak, to beat the deadline and lenders' pipelines looked like a recently-fed boa constrictor for a while.

Now that I've given you the background information, here's what I think you really want to know: Under normal circumstances, it shouldn't take longer than three to four weeks to get to closing on a purchase transaction. If you get your "official approval" and can close in less than three weeks, everyone involved is doing a very good job. In busy times, it might take a little longer, but most lenders make every effort to give priority to purchases. Refinances usually take a little longer because the urgency isn't as great as with a purchase -- though lenders have been known to "rush" files under certain circumstances.

As much as there are times when it looks like things are taking "way to long," rest assured that most lenders want to close files as efficiently and quickly as circumstances permit. If you are working with a reputable company and a professional loan officer who regularly communicates with you, you'll know, at the very least, the reason for any delays.

Actually it should take a couple of days just from the particular time an underwriter receives a loan file to provide approval what you really refer to as an official approval. But if in case your file is having any problem related to credit score or any document related issue than it may take much time to approve.

For getting an official approval for a loan would take 3 – 4 working days to be underwritten. I’m talking about 3 -4 days only if all your documents are completed and fit according to the wants. Else, it would be a long procedure, as the process is going start away from a new end. One has to very careful while filling up for loan and should be aware of all the norms being asked; can also take the experts help and indulge easy payday loans for instant queries regarding cash.