How Long Does It Take To Close On A New Home?
Buying a house is one of the most important decisions you will make. It may be something you've been dreaming about for as long as you can remember, so it's imperative to take your time and find the perfect home. To get you started, here are the steps between the day your offer is accepted and the day you get the keys.
1. The closing process begins: Plan for the big picture
The day you sign your contract to buy a house is an exciting time. A house closing process typically takes 30-60 days, but you must take your time and get the paperwork done correctly.
2. Place your offer
Most buyers use a real estate agent to help them submit their offer. The real estate agent researches the market, negotiates a price with the seller, and then presents your offer to a title company for evaluation. The title company will likely also contact an appraisal company to evaluate the property's value and ensure it is within your budget.
3. Submit documents and answer requests from the lender
You will need to supply the lender with documents, such as a W-2 form and proof of your income. The lender will also want a copy of your credit report. If you are a new homeowner, the lender may also require that you attend a homeownership education course. Your mortgage lender will also need to know when you want to move into your home.
4. Wait for responses and decisions from the lender
The lender will review your offer and provide the information back to you. The closing process may take a few days, although sometimes it can take weeks in rare cases where all parties do not agree on terms. If a closing date has been set, you will need to be ready to sign your loan documents at that time, or else you will lose out on the bidding process.
5. Shop for title insurance and other closing services
Average time: 7-14 days
The lender's title insurance protects his interests by insuring against a title failure.
The lender also wants to make sure a title company is acting in good faith. This can be accomplished by using an independent title company to perform all your transactions and closing services for you. The closing costs for such transactions are typically at least 1% of the amount owed or $500, whichever is lower. You can shop around and get competitive bids for the title and closing services. Many title companies offer special discounts for first-time homebuyers.
6. Close your financing
An essential part of the process is reviewing the final documents, such as your mortgage, deed, and title insurance policy. If you have brought a lawyer to the closing table (a good idea if you are dealing with a large amount of money), they will also make sure that everything is in order before proceeding with the closing of your loan. You must sign all necessary documents to finalize the transaction. Still, you can elect not to sign some papers (usually relating to title insurance), which your agent and attorney will sign in your place. The services you need to complete your home purchase.