While some people can get approved for a mortgage in 30 days, the mortgage timeline can depend on different factors. The underwriting process, which is the process by which lenders figure out if you are a good risk for a loan, can be delayed if you don’t provide the important documents lenders need to verify savings and income. Missed payments or other marks on your credit report can also push back the mortgage timeline.
If you have a great credit score and report and do provide all the important paperwork, your lender can give you approval after about 72 hours. However, this approval is not going to be a final one and it’s known as conditional approval. Your lender will need to have more documents to support your income before you can get final approval. You also will need to wait until you get an appraisal on your property. If you are buying, you then also need to show proof of home insurance. These last steps can add weeks to your process before you get that final approval.
One of the main factors that can delay your mortgage approval is credit disputes. A credit problem doesn’t just make you pay a higher mortgage, but it can also slow down the approval process, especially if you have an account that is in dispute. A lender won’t move forward with approval until the dispute tag is removed. Once this tag is removed, then the lender still needs to run your credit again to make sure that the resolution hasn’t lowered your score. This can take a lot of time and delay the process.
Missing documents can also slow down your approval process. If your lender asks for two years of tax returns and you are only providing one, then you won’t get approval until you provide the other documentation needed. Your lender won’t just forget about this request and the underwriting process will stall until you provide what is needed. Don’t ignore any requests. A lender is only going to ask for the documents that are needed, so ignoring the request won’t make it go away and, instead, is just going to cost you time.
Your lender may require extra paperwork if you have several recent large deposits in your bank account. Your lender will need a letter that explains where this money came from, and may also need some supporting documents to confirm the letter is true. For example, if you have a large deposit from selling your car, then the lender will want to see the bill of sale that verifies this. If you have deposited $6,000 after you got a year-end bonus, then the lender may want you to have a letter from your employer that this was in fact a real bonus. The reasons for this verification are because the lender wants to make sure you aren’t getting another loan you will have to pay back. If a large deposit needs to be paid back, then a lender needs to count it as part of your debt.
The Underwriting Process
The underwriting process for a mortgage loan is when a lender checks your eligibility by verifying your income, liabilities, assets, and credit history. It’s after this process that you can be approved for a loan. The process will take place after you have made a down payment for a home. You can either be approved, rejected, or the application can be suspended. This process involves several steps so any problems will delay and cause your mortgage timeline to be longer. Getting everything in order before you apply for a mortgage can make things go smoother and quicker.