Does Loan Approval Come Before Appraisal?

The time that elapses from valuation to closing may vary, and mortgage terms may differ depending on individual situations. Generally, lenders estimate that this period usually takes 30 to 45 days. The subscription process can take a few days to a few weeks before you are authorized to close. This report will include the appraiser's opinion on the fair market value of the home, and this whole process usually takes a week or less.

According to ICE Mortgage Technology, conventional loans take an average of 44 days to close: 43 days on average for a purchase transaction and 46 days for a refinance. Federal Housing Administration (FHA) loans take an average of 45 days to close, with an average of 44 days for home purchases. When you apply for this type of mortgage loan, the insurer will ensure that your application meets the lender's standards, as well as those established by the FHA. This process can take anywhere from a few days to a few weeks. For VA loans, the insurer will ensure that your application meets both the lender's standards and the requirements created by the Department of Veterans Affairs (VA).

Part of this will include verifying that you meet the service requirements to be eligible for a VA loan, which takes anywhere from a few days to a few weeks. The process that lenders use to determine if they approve that loan is called underwriting. To that end, they follow a series of steps that allow them to assess their finances and the likelihood that they will be able to repay the loan on time. If the new information substantially changes the underwriting decision and results in the denial of your credit request, if the loan is not closed for a reason beyond Rocket Mortgage's control, or if you no longer wish to continue with the loan, your participation in the program will be suspended. Lenders don't want to lend more than the house is worth, because the property acts as collateral in the event of a loan default. That will cause them to question other information you've provided, even if it's objective, and could cause them to decline your loan request. Most of the closing process is comprised of the various steps your lender will take to ensure that you are creditworthy and that you are not taking on excessive risk with your loan.

While underwriting your loan is mostly out of reach, there are a few things you can do as a borrower to ensure a smoother process. Your insurer will carefully analyze your financial information and the value of the property you're buying to make sure you're not taking too much risk when approving your mortgage loan. Prior to subscription, a loan officer or mortgage broker collects a variety of documents necessary for your application. Going through the pre-approval process before starting your search will help you make offers with confidence and resolve any issues on your application before going through the subscription process, which can help you save time once you've found your future home. The last step is the closing day, which is when the lender finances your loan and pays the selling party in exchange for title to the property. This offer does not apply to new purchase loans presented to Rocket Mortgage through a mortgage broker.

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