Once the purchase agreement has been signed by the borrower for an eligible property, the approval process usually takes two to three weeks, or sometimes two to three months. There are various variables involved.
When keeping in mind the entire process, from the starting to the final approval and closing, it can take two weeks or two months depending upon the obstacles. This comes in assumption that you have already found a property, completed the negotiations and have a purchase agreement ready. Delays can happen anywhere, anytime. There are two stages involved:
- Document gathering on the front end
- Resolution of underwriting issues or conditions involved later in the process.
Most of the delays occur this way when it comes to an FHA loan. You possess some control over these two aspects. For example, you have rounded up all the required documents while applying for the loan. Additionally, when the underwriter presents you with any conditions that require resolution before the approval, you manage those items sternly. These are the two methods to quicken up the process. The FHA approval process may vary, but sometimes it is also related to the individual who applied for the loan. For instance, you might have banking or credit issues that popped up during the underwriting method. So the underwriter sends them a list of conditions to be fulfilled, before the loan proceeds. This is referred to as a conditional approval.
Some other issues that can delay the loan process are as follows:
- Additional bank account deposits or withdrawals while loan process is undergoing with closing cost funds and/or down payment,
- Variables to the borrower’s income or employment conditions
- An incomplete application file submitted by the loan officer
- The house is priced below the purchase price
- Property has title issues
Of course, the slowed down loan process is not always the fault of the individual who applied for the loan. Many times an inexperienced underwriter can slow things down to a crawl. Many times, things are not under your control.
House Hunting Variable
This is another major variable. If you have already found a property and have a purchase agreement ready, you can proceed to appraisal and underwriting stage. The lender sends an appraiser to ascertain the existing market value of the property. After this process, the application file is forwarded to the underwriter. If you haven’t found the property yet, then it is entirely a different case.
To know more what FHA loan is, visit here.
