Closing on a House: How Long It Takes, What to Expect
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There are two major edge-of-your-seat suspenseful situations when buying a home: getting preapproved for a mortgage and closing on a house. Both are filled with anticipation and anxiety.
First, there's a huge sigh of relief when you're approved for a loan by a lender (or better yet, approved by three lenders so you compare and choose the best offer). But the waiting game begins all over again after you make an offer on a house and select the lender for the actual loan; then the underwriting process gets underway and you count the days to signing the mortgage and finally getting the keys to your new home.
Here's what you need to know about closing on a house.
How long does it take to close on a home?
The question most people ask — how long does it take to close on a home? — requires a two-part answer:
How long it takes from submitting a mortgage application to the actual closing day. About 30 to 45 days. With electronic data gathering and increasing competition, lenders are reducing this time frame. However, for the 12-month period ending December 2020, the average was 47 days to close a loan on a purchase, according to Ellie Mae, a technology company serving mortgage lenders.
How long the closing itself — reviewing and signing all of the loan documents — takes. If your loan settlement, or closing, is happening at a table with all parties gathered together, figure on at least an hour or so. There are also mobile, mail and online closings, which can be much faster — or a great deal slower.
What happens at a mortgage loan closing?
At closing, you'll carefully review and then sign all of the legal documents required for the lender to issue a mortgage and transfer the ownership of the property to you. The loan proceeds equal to the purchase price will also be distributed to the seller.
Closing paperwork for the buyer includes:
The promissory note, committing you (promissory = promise) to repay the loan.
The mortgage, giving the lender the right to foreclose on the property if you don't pay. (It might also be called the Deed of Trust or security instrument.)
The escrow disclosure, detailing the charges that will be incorporated into your monthly payment for taxes and insurance.
A right-to-cancel form, allowing you three business days to call off the whole deal.
There will also be a generous pile of disclosures, disclaimers and government-mandated documents to read and sign.
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What you need to bring to the closing
Be sure to ask your lender rep and closing agent or real estate attorney well ahead of time what you'll need to provide at closing. At the very least, you'll want to have:
Your personal identification, such as a driver's license.
The Closing Disclosure you received three days before closing so that you can compare it with the documents you'll sign.
And a cashier's check or wire transfer receipt for the funds you owe at closing.
What you'll pay at closing
All of this is detailed on the Loan Estimate when you apply for a mortgage, as well as on the Closing Disclosure that will be in your hands three days before closing. Expect to pay:
Lender origination fee and third-party fees that haven't already been paid.
A prorated portion of property taxes.
Interest that will accrue before your first mortgage payment.
An amount applied to the homeowner's insurance coverage.
Title insurance premium.
And perhaps a portion of HOA fees if applicable to your property.
» MORE: Calculate your closing costs
See NerdWallet's complete guide to closing costs to get a more detailed idea of how much you'll pay at closing.