A mortgage loan takes about 60 days from the time you apply for a mortgage loan to the time your loan funds. During that time, you can talk to other lenders and compare interest rates and fees. Most lenders are competitive and are willing to make small adjustments in their costs, if you find a better loan. Ask for a good-faith estimate from each lender for an accurate comparison. In most cases, it is better to negotiate with the lender you are working with than it is to start the process over again.
Processing and Underwriting
Once you provide your documentation to a lender or a broker, the loan goes through a processing stage where a loan processor verifies the information you provided. After verifications are complete, your file goes to underwriting to determine if your application meets the lender's underwriting requirements.
While the loan is processed, the lender orders an appraisal to determine the value of the property. In most cases, the lender will require that you pay the appraiser prior to your loan approval. It is possible to back out of the application after you pay for an appraisal, but another lender cannot use it. If you decide to use a different lender, you will have to pay for another appraisal.
When you receive a loan approval, the lender will prepare loan documents for you to sign. If the property is not going to be your primary residence, and you wish to back out of the mortgage, you need to do it before you sign your loan documents. Once you sign the documents and they are notarized, the lender can fund your loan at any time.
If the property will be your primary residence, the loan will be subject to a three-day rescission law, which states that you can cancel your loan during the rescission period at no cost or obligation on your part. In most cases, you will have already paid for an appraisal. The three days are business days. Saturdays count, but Sundays and federal holidays do not.