If you’re ready to purchase a new home, you may be wondering just how long the process will take. After all, it’s possible you need to figure out some of the logistics of your move.
For example, you may need to decide whether to ask your landlord for an extension on your lease. Or, perhaps you need to consider your child’s school schedule or how much notice to give your employer. With this in mind, it’s smart to learn and understand how long buying a house usually takes.
The timeline of any home sale can vary based on a broad range of factors. However, each step can be fairly predictable on its own.
How Long It Takes to Buy a House
Here’s how much time you should expect to wait for each step of your home sale as you plan out the next important steps in your life.
1. Preparing Your Credit for Homeownership: (0–12 Weeks)
The credit score required to qualify for a mortgage can vary depending on the mortgage lender and type of mortgage. However, you will always have a better chance of qualifying for a mortgage loan with the best rates if you have good credit.
According to myFico.com, consumers with FICO scores of 740 or above have the best chance at qualifying for a mortgage with excellent terms and a low interest rate. Meanwhile, consumers with “good credit,” or FICO scores between 679 and 740, are not guaranteed the best terms. The chances of qualifying for one of the best home loans is much lower for anyone with a score below that level.
That’s why, if your credit history isn’t great, you should work on improving it before you apply for a mortgage. The most important steps you can take to improve your credit include:
- Get a copy of your credit report and check it for errors. You can get a free copy of your report from all three credit reporting agencies — Experian, Equifax, and TransUnion. You get one copy for free each year at AnnualCreditReport.com.
- Pay all your bills on time. This is important since your payment history makes up 35% of your FICO score.
- Pay down debt. Many credit-scoring models consider how much debt you have when determining your credit score. So, paying down some of your existing debt may help improve your credit in the short term and the long haul.
If your credit is already good or excellent, you can skip this step altogether. If it’s not, you have some work to do.
2. Get Preapproved for a Mortgage: (1–2 Days)
Your credit is ready for a mortgage, so now what? Before you start house hunting, the next step is checking in with mortgage providers to get preapproved. There are a few reasons you should bother getting preapproved before you start shopping.
A preapproval is a lender’s written commitment to loan you a certain amount of money for a home purchase. It’s based on a review of your credit and financial information and is one way to prove to sellers that you’re a serious buyer. This gives you an advantage over other buyers who aren’t preapproved if you have a letter.
Getting preliminary preapproval for a mortgage will also help you discover how much money the bank is willing to lend you. This figure or range of figures will let you know the price range of homes you should search for.
If you’re in the process of shopping for a new home, it’s important to understand the difference between prequalification and preapproval. Prequalification can help you get an idea of what your budget should be. However, to move forward with a purchase, you’ll need a preapproval.
What Is a Preapproval Letter?
A preapproval letter is a document from a lender stating that a borrower has qualified for a loan up to a certain amount based on their credit history, income, and other financial information.
The preapproval letter is not a guarantee of loan approval, but it does give the borrower an idea of what size loan they may qualify for and the terms of the loan.
Shop Around for the Best Rates and Terms
As you prepare to get preapproved for a home loan, make sure you’re checking with several mortgage lenders so you can compare interest rates and fees. Some websites let you enter your information once to receive multiple offers from lenders who are competing for your business.
What You Will Need to Get Preapproved
Make sure to research lenders and mortgage websites that connect you with multiple home loans before you decide whom to work with.
To get preapproved, you typically need to supply the following:
- At least one month of pay stubs
- Employment information for the last two years
- Two years of W-2s
- One or two years of tax returns
- Three months of bank statements
- Even more information if you’re self-employed.
The lender will then use this information to determine your loan amount and interest rate.
When you apply for a mortgage preapproval, the lender will pull your credit report. This can result in a hard inquiry on your credit report, which can temporarily lower your credit score.
Keep in mind that this step can take a few days or several weeks. Make sure you have a mortgage preapproval letter in your hands before you move onto the next step.
3. Finding a Home and Getting an Accepted Offer: Varies
Once you’re preapproved and have a good idea of how much house you can afford, it’s time to start searching for your dream home. Unfortunately, this is one step that can vary dramatically in length and scope. You might find the perfect home on your first day of searching. However, it could also take months of searching for a home you actually want to buy.
You’ll likely want to work with a real estate agent during this part of your journey. They can help you find homes in your price range. They also set up times for you to enter and inspect homes you’re interested in.
Once you find a home to buy, you can also rely on the help of a realtor to write up an offer. This part of the home buying process can also take days or weeks, depending on how quickly the sellers respond. They might submit a counteroffer that requires you to think long and hard about the home sale for a few days. Heck, you could each submit several counteroffers back and forth, each taking a few days to execute.
4. Closing on Your Home: (30–50 Days)
Once you have reached an agreement with the home’s seller, you’ll begin moving toward the closing process. During this step of the mortgage process, your lender may need more financial paperwork that helps them verify you qualify for the loan.
To prove you are still in the same financial position you were when you were preapproved for your loan, you may need to provide additional bank statements or pay stubs.
While you’re waiting to close on your home, you’ll also want to hire a home inspector to look over the property to check for needed repairs. The home inspection usually takes a few days to schedule, but only a few hours to inspect. After the home inspection, you may also negotiate back and forth with the seller to agree on who will pay said repairs and if any concessions should be made.
Sometimes closing takes as little as one month, but it can often take a lot longer than that. Either way, it helps to get back with your lender quickly if they ask you to submit additional documentation. You don’t want to leave them waiting and prolong the home buying process unnecessarily.
Once your closing date arrives, you’ll sit down with all parties. This includes lawyers when applicable, buyer and seller’s real estate agent, title company, the closing agent, and perhaps even a representative of the lender.
You’ll sign all the important documents pertaining to your home loan. You’ll also bring money to the table to cover your share of closing costs and your down payment. Once you’re done, the keys and the home are finally yours.
Frequently Asked Questions
How long does it take to buy a house?
Generally, it takes between two and six months to purchase a house. This timeline may vary depending on the complexity of the transaction and the availability of financing.
What factors can affect the timeline for buying a house?
Factors that can affect the timeline for buying a house include:
- The availability of financing
- The complexity of the transaction
- The number of buyers in the real estate market
- The availability of properties
What are the steps involved in buying a house?
The steps involved in buying a house include:
- Researching the housing market
- Finding a real estate agent
- Getting preapproved for a mortgage
- Making an offer and negotiating
- Securing financing
- Closing on the purchase.
How can I get preapproved for a mortgage?
To get preapproved for a mortgage, you will need to provide documentation such as your income and employment information and your credit report. Your lender will then review your information and provide you with a pre-approval letter.
What is the difference between pre-qualifying and pre-approving for a mortgage?
Pre-qualifying for a mortgage involves providing information to a lender, who then estimates how much you can afford to borrow. Pre-approval involves providing documents to a lender, who then verifies your information and issues a letter of pre-approval that you can use when making an offer on a house.
How can I find a real estate agent?
You can find a real estate agent by asking friends, family, and colleagues for recommendations, or by searching online. You can also look for an agent through the National Association of Realtors or by visiting your local real estate board.
How long does the underwriting process take?
The underwriting process can take anywhere from a few days to a few weeks. The timeline depends largely on the complexity of the loan and the number of documents the lender needs to review.
What is a closing?
A closing is the last step in the home-buying process. It is when the transfer of ownership is finalized and the buyer and seller sign the closing documents. At the closing, the buyer pays the remaining balance of the purchase price and the deed is transferred from the seller to the buyer.
What documents should I bring to the closing?
At the closing, you will typically need to provide a valid photo ID, proof of homeowner’s insurance, a copy of the purchase agreement, and a certified or cashier’s check for the remaining balance of the purchase price.
Should I use a mortgage broker?
Deciding whether to use a mortgage broker largely depends on your unique requirements and preferences. By engaging a mortgage broker, you stand to gain access to a broader range of lenders, thus increasing the likelihood of securing the best mortgage rates and terms.
In addition to providing access to lenders, mortgage brokers can offer valuable guidance and advice throughout the process, which can be especially beneficial if you are unfamiliar with the ins and outs of securing a mortgage. However, it’s worth noting that mortgage brokers do charge a fee for their services, which can add to the overall cost of obtaining a mortgage. Ultimately, it’s up to you to decide whether the benefit is worth the cost.
Can I buy a house with cash?
Yes, you can buy a house with cash. However, the seller may still request evidence of your available funds.
The seller may request to see bank statements or other financial documents that demonstrate that you have the necessary funds to complete the transaction. This process can provide the seller with peace of mind that the sale will go smoothly. It can also help to prevent any misunderstandings or disputes from arising during the purchasing process.
The details above describe what usually happens when someone purchases a home. However, there are many variables that could throw these timelines out of whack. You may find you have trouble qualifying for a mortgage altogether, for example. Or maybe you spend months or years finding a home you like!
Whatever hurdles you encounter, make sure to keep your credit in good shape and continue saving for a down payment. The better financial shape you’re in, the better chance you have at winding up with the home of your dreams.