How Soon Can a Bank Close a Mortgage Loan?
A real estate contract to close on a new home within 45 days could raise a few concerns. You may wonder whether your bank can meet the closing deadline or whether delays could stall your plan. Typically, a bank can close a mortgage loan for a qualified borrower rather quickly. Because a bank generally uses its own resources to fund a home loan, your loan could settle quickly.
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Loan Application
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A properly completed loan application can increase the speed toward closing a mortgage loan. If you need to close a mortgage loan soon, call your bank to inquire about the types of documents you need to submit. Ensure your loan application is completed appropriately. Make an appointment to review your completed loan application with your banker. Take your financial documentation, such as your earnings history for the past two years, to the appointment. Your loan may close sooner if you have satisfied the initial submission requirements.
Processing Time
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Processing times vary, as mortgage loan files are reviewed on an individual basis. Typically, a mortgage loan transaction can close within 60 days of submission of a loan application. A loan processor verifies the authenticity and the accuracy of an applicant's submitted information. Details such as a borrower's income, employer, credit, past addresses, citizenship and assets are checked and forwarded to an underwriter for a final loan approval.
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Appraisal
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The appraisal is an important element of the loan approval process. Your loan processor will order an appraisal to determine the value of a home. A bank could estimate the amount of your loan during the loan processing stages; however, the final appraisal report is used to establish the value of the property. Banks generally follow internal guidelines that permit an underwriter to issue a loan approval, which is based on the appraised property value and the borrower's qualifications.
Settlement
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Settlement for your home loan can come after a mortgage underwriter has cleared your loan file for closing. Documents are drawn and forwarded to the closing attorney, who will review the bank's instructions and prepare forms for you to sign. You need to present a state-issued form of identification or a valid driver's license to help the attorney validate your identity. The settlement forms typically are completed within an hour.
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