How Long Does It Take to Close on a House?
You can close on a house in one to two weeks if you’re paying cash, while it may take more than 50 days to close on a home if you need a mortgage. If you’re buying in a competitive housing market, understanding how long it takes to close on a house could mean the difference between an accepted and rejected offer.
How long does it take to close on a house if you can pay cash?
It can take as little as seven to 10 days to close on a house if you can come up with the cash to buy it. You won’t need the paperwork required by a mortgage company, but there are still some important steps you’ll need to take.
It’s not uncommon for a seller to request a bank or investment fund statement before accepting an all-cash offer. You can save time by providing this information with your offer letter.
An escrow company’s job is to act as a third party, oversee the transaction and make sure the terms of the contract are met. Funds should never go directly to the seller.
As a cash buyer, you aren’t required to buy title insurance, but it may still be worth it to obtain a title search to protect yourself against claims related to the prior owner’s actions. Mortgage lenders require a title search to check a home’s title history for past liens or heirs.
A home inspection isn’t required on a cash purchase, but it’s highly recommended to check for hidden problems the seller may not be aware of.
How long does it take to close on a house if you need a mortgage?
It takes between 48 and 53 days to close on a house if you need a mortgage backed by the Federal Housing Administration (FHA) or U.S. Department of Veterans Affairs (VA), or a conventional loan. According to ICE Mortgage Technology’s August 2021 Origination Insight Report, it took:
However, a faster closing process is possible if:
You don’t need an appraisal. You may be eligible for an appraisal waiver if you’re making a large down payment on a conventional mortgage. Fannie Mae or Freddie Mac — government-sponsored enterprises that fuel the mortgage market — offer property inspection waivers (PIWs) or automated collateral evaluations (ACEs) if you qualify.
You have a strong financial profile. A credit score above 740, two years’ worth of stable employment, a salary and a large down payment may lead to a faster closing. Lenders may need management approval to approve a loan with complex self-employed income, credit history bumps or an unusual down payment source.
You’re buying a home with no title issues.If you’re buying from a seller who has owned your home for two years or more and the home isn’t in foreclosure, the title search shouldn’t take long. However, if the home is part of a divorce settlement or the current owner is in mortgage default, this process may take longer.
What to expect on closing day
Once your loan is ready for closing, the actual closing typically takes one day if you’re buying a home with cash. Federal law mandates a three-business-day closing process that begins when the lender issues a closing disclosure if you’re taking out a mortgage.
The table below breaks out what happens with each type of closing:
|Closing on a house with cash
|Closing on a house with a mortgage
What could delay closing on a house?
The following common issues and mistakes may slow down or bring your entire house closing process to a screeching halt:
FAQs about closing on a house
What does ‘clear to close’ on a mortgage mean?
“Clear to close” is a lender term that means you’ve satisfied all the terms of the loan and can finalize your loan paperwork.
How long does funding take after closing?
This depends on whether your lender funds under “wet” state or “dry” state rules. In a wet state, your funds are typically delivered at the same time as your closing documents. In a dry state, the lender doesn’t wire the money for your loan until they review and sign off on the closing package. Currently, only Alaska, Arizona, California, Hawaii, Idaho, Nevada, New Mexico, Oregon and Washington allow dry fundings.
Can you close on a house in two weeks?
Yes, if you’re prepared to pay cash or qualify for a mortgage that doesn’t require an appraisal.
How can I speed up closing on a house?
You can pay cash or choose a mortgage program that offers an appraisal waiver option. Make sure to stay on top of documentation requests if you’re taking out a mortgage. You should also open escrow and order inspections as quickly as possible to keep the process moving along.