The entire mortgage process has several parts, including obtaining pre-approval, appraising the home and obtaining the actual loan. In a normal market, this process takes about 30 days on average, according to experts. During high-volume months, it can take longer, an average of 45 to 60 days, depending on the lender. If the lender discovers any financial problems in your history, it can take up to 10 days to get pre-approved.
However, Credible offers a simpler process that can take anywhere from 24 hours to 10 days. Pre-approval is an important step in the mortgage process as it informs you of the loan for which you qualify and gives you an advantage over other buyers. If your credit is impeccable and you provide all the necessary documentation to your lender when you submit your loan application, your lender may be able to give you some kind of approval quickly, often within 72 hours. The higher your score and the better your payment history, the better your chances of being approved for a reasonable interest rate.
When you make an offer on a home, you'll attach your pre-approval letter to show that you've been examined by a lender and that you have creditworthiness. Before you even begin the pre-approval process, it's important to compare mortgage rates and find the lender that's right for you. They can also cause a significant slowdown in the approval process, especially if you have disputed accounts. Prequalification is useful when you're in the early stages of buying a home and you're trying to calculate a budget, but you'll need prior approval when buying a new home.
Your lender will most likely only issue you what's known as conditional approval after this short period. When you get pre-approved, you'll receive a letter from your mortgage lender telling you how much money you can borrow to buy a home. However, remember that pre-approval doesn't mean you're guaranteed a loan, and you'll still have to go through the underwriting process to get officially approved.
