You have found your dream house, negotiated the price, got a mortgage approval, and now you are excited to move into your new home. The only question popping in your mind is probably: “how long does house closing take and can we pay closing cost with credit card?” House closing is a critical aspect of the home buying process, but how long it takes varies due to many factors. In this informative piece, we will delve into these specifics, giving you a clear perspective on the time frames involved in closing a house.
How Long Does Closing On A House Take?
The house closing process, also known as settlement, involves finalizing the mortgage, signing documents, paying closing costs, and transferring the home title. The average time it takes to close a house in the U.S. typically ranges from 30 to 45 days. However, this timeline can vary based on several factors including the type of mortgage, the lender’s efficiency, the property’s uniqueness, and any potential complications that might arise.
The Mortgage Type and Lender’s Efficiency
The kind of mortgage and the lender’s efficiency can significantly influence the house closing timeline. For instance, the Veterans Affairs (VA) and Federal Housing Administration (FHA) loans may take between 45 and 60 days due to their complex approval processes. In contrast, a conventional mortgage might close within 30 to 45 days. Remember, your mortgage lender plays a crucial role in the timeline, so ensure they are efficient.
The Property’s Uniqueness and Potential Complications
When the property in question has unique aspects, such as being a short sale or foreclosure, the house closing process can take longer. In some instances, potential complications such as disputes over home inspections, repairs, or appraisals might extend the timeline to 60 days or more.
How Long Does Closing Day Take?
Closing day is the culmination of the house closing process. It is when the buyer signs the necessary documents, pays the closing costs, and the home title is transferred. On average, closing day takes about 1.5 to 2 hours, but it can take longer depending on various factors.
The time you spend signing documents primarily depends on the number and complexity of documents. As a first-time home buyer, you may need more time to read through and understand all the paperwork. This process can take up to an hour or more.
Pay Closing Costs
Closing costs generally range between 2% and 5% of the loan amount. The method of payment can affect how long this part of the process takes. Electronic wire transfers are faster and can be completed in a few minutes, while writing and processing a check might take longer.
Transfer The Home Title
Once the documents are signed and the closing costs are paid, the home title is transferred from the seller to the buyer. This transfer is usually immediate, but recording the new title deed with the county recorder’s office might take a few days.
What Happens During Closing
The closing of a house is the final step in the home buying process. At this point, the buyer completes the payment, the seller hands over the title, and the buyer becomes the official owner of the home. This process, also known as settlement or escrow, is usually a methodical yet exciting event for everyone involved.
Who is Present on Closing Day?
On closing day, several key individuals usually attend the meeting. This includes the buyer, seller, real estate agents representing both parties, a representative from the title company, and the mortgage lender. Additionally, attorneys might be present, depending on the state’s regulations and the complexity of the deal.
How Long Does Closing Day Take for Sellers?
For sellers, maybe have this question “who pays closing cost when selling a house by owner?. closing day is often less time-consuming than for buyers. Sellers may need about 30 to 60 minutes to sign all necessary paperwork. However, in some instances, sellers might not even need to be present and can pre-sign their documents or have a power of attorney represent them.
How Long Does Closing Day Take for Buyers?
Closing day typically takes longer for buyers due to the volume of paperwork that needs to be signed. This process may take anywhere from 1.5 to 2 hours. As a buyer, you are required to sign a host of documents, including the loan agreement, the mortgage note, and the settlement statement, among others.
Can Buyers or Sellers Close Remotely?
In today’s digital era, remote closing has become a viable option for both buyers and sellers. This process, often known as a mail-away or digital closing, allows buyers and sellers to sign their closing documents remotely. This method is especially convenient for those involved in out-of-state transactions or for those who cannot physically attend the closing meeting.
What Needs to Happen Before Closing Day
Before the big day of closing, several important tasks need to be completed to ensure a smooth process. Buyers should have their mortgage fully approved and their home insurance in place. It’s also crucial to conduct a final walk-through of the property to confirm that all agreed-upon repairs have been made and the house is in the expected condition.
Sellers, on the other hand, must ensure they’ve met all the conditions outlined in the purchase agreement, such as making necessary repairs. They also need to have all the necessary paperwork ready for closing day.
The closing process can seem overwhelming, but with careful preparation and a clear understanding of what’s involved, it can go smoothly and swiftly. This understanding begins with answering the common question of “how long does house closing take” to familiarizing oneself with all the stages of the process.
What Needs to Happen Before Closing Day?
Before closing day arrives, there are several essential steps that buyers and sellers must take to ensure a smooth and successful transaction. This intricate journey from having an offer accepted to finally receiving the keys often involves several stages. Let’s explore these critical steps in detail:
Negotiate the Contract (4 Days)
The first step in the closing process is contract negotiation. Once the buyer makes an offer and the seller accepts it, they negotiate the terms of the contract. This process includes discussions on the selling price, contingencies, closing date, and other key elements. On average, this stage may take about 4 days, but can extend if the negotiations are complex or the parties can’t initially agree on the terms.
Buyer Schedules a Home Inspection
Once the contract is negotiated, the buyer schedules a home inspection. This step is crucial to assess the property’s condition and identify any potential issues. The inspection typically occurs within a week of the contract being accepted. The findings from this inspection can lead to further negotiations on price or repair responsibilities.
Finalize the Purchase Agreement
Following a satisfactory home inspection, the buyer and seller will finalize the purchase agreement. This document outlines the final selling price, the property’s legal description, the closing date, and any contingencies that remain (like financial or sale of another home contingencies).
Buyer Finalizes the Mortgage Application
Simultaneously, the buyer works on finalizing their mortgage application. This involves submitting all necessary financial documents to the lender, including bank statements mortgage, tax returns, and employment verification. The lender then begins the underwriting process.
The Mortgage Company Orders an Appraisal
As part of the mortgage approval process, the lender orders an appraisal of the property to confirm its value. This ensures that the amount of the mortgage does not exceed the property’s worth. The appraiser visits the property, reviews comparable sales, and generates an appraisal report.
Buyer Receives Final Loan Approval
The last step before closing is the final maximum DTI ratio for VA loan approval. During this stage, the lender reviews the buyer’s financial information, the home inspection report, and the appraisal to determine if they will finalize the mortgage. Once the buyer receives this final approval, the closing date is set, and preparations for the closing day can begin.
What is the Best Date to Close on a House?
Choosing the best date to close on a house can be strategic and depends on the buyer’s personal circumstances. Some experts suggest scheduling the closing date towards the end of the month can save on upfront interest costs. However, scheduling earlier in the month provides more time to resolve any last-minute issues that might delay the closing.
Furthermore, if the buyer is renting, aligning the closing date with the end of a lease can avoid paying both rent and a new mortgage simultaneously. Lastly, consider the moving process – choosing a closing date that aligns with moving plans can make the transition smoother. Thus, while there’s no one-size-fits-all answer, strategic planning can help determine the best date for closing on a house.
Conclusion: How Just Funded Mortgage Can Help You
Understanding the house closing process, including how long it takes, can seem daunting, especially for first-time buyers. This is where Just Funded Mortgage comes in. We offer efficient and personalized mortgage solutions, ensuring you sail through the closing process with ease and speed. We take pride in our transparent processes and our dedication to educating buyers, ensuring you understand every step of the way. So, when you ask, “how long does house closing take?”, you can rest assured that with Just Funded Mortgage, you are in capable hands.
As an experienced professional in the mortgage loan and property market, Help individuals and families achieve their homeownership dreams. My mission is to simplify your real estate journey and secure the best possible outcomes in this ever-changing market.