How Long Does It Take to Get Approved for a Mortgage Loan in 2020?

Getting approved for a mortgage loan is an exciting step on the path to homeownership. But it also involves a lot of paperwork, waiting, and uncertainty about timelines. If you’re wondering, “How long does it take to get approved for a mortgage in 2020?” this guide will walk you through what to expect during a typical mortgage approval process.

The Short Answer

The total time it takes to get approved for a mortgage loan can vary quite a bit but the general range is between 30-60 days from the time you formally apply until you get an approval. However there are steps you need to complete before applying that can add 1-2 weeks or more. And if issues crop up during underwriting, it may take longer than 60 days. Being proactive by getting pre-approved and having all your paperwork ready can help shorten the process.

Step-by-Step Timeline

Getting approved for a home loan in 2020 involves several key steps Here is an overview of the typical mortgage approval timeline from start to finish

1. Budget & Research (1 Week)

• Evaluate your current finances, debts, assets, credit, and income to understand your financial position. Looking at a recent credit report from AnnualCreditReport.com can help.

• Calculate your ideal housing budget. Experts recommend keeping housing costs below 30% of your gross monthly income.

• Research different loan options like conventional, FHA, VA, USDA loans. Compare interest rates, down payments, and requirements.

2. Get Pre-Approved (1 Week)

• Contact lenders to get pre-approved. This shows sellers you’re qualified and serious. It also gives you an estimated loan amount you can afford.

• Provide documents like pay stubs, W-2s, tax returns, and bank statements to give lenders a clear picture of your financials.

• Compare loan estimates from multiple lenders. Look at interest rates, fees, loan programs, and reputation.

3. Find a Home & Make an Offer (2-3 Months)

• With your pre-approval letter, start actively looking for homes in your budget. The average home search takes 8-12 weeks.

• Once you find the perfect home, make an offer and negotiate a purchase price with the sellers.

• Your pre-approval is typically good for 60-90 days. Get an updated one if your search goes beyond that.

4. Complete Mortgage Application (1 Week)

• When your offer is accepted, apply for a mortgage loan right away. Provide updated documents if your situation has changed.

• Choose the loan program, rate, term, etc. you want. Sign disclosures and the initial Loan Estimate.

• Your lender orders appraisal & title work. Double check your rate lock date.

5. Underwriting & Processing (2-4 Weeks)

• Your lender verifies all your employment, income, assets, debts, and credit information through underwriting.

• Expect follow up requests from your lender for any missing paperwork or clarifications needed.

• The property gets appraised, inspected, and evaluated to ensure it meets underwriting requirements.

6. Mortgage Approval! (1 Week)

• Once underwriting is complete, you’ll receive a final loan decision – either an approval or denial.

• If approved, your interest rate and terms will be locked in. Lender prepares closing docs.

• Denials can happen for reasons like job loss or finding undisclosed debts. Discuss options with lender if this happens.

• The Closing Disclosure form with final costs is issued 3 days before closing date.

Factors That Impact Timeline

While the typical approval process follows the steps above, there are variables that can shorten or extend the timeframe:

• Your preparation – Getting documents ready in advance rather than trying to track things down during underwriting can shave off 1-2 weeks.

• Your credit and financials – A pristine credit history with no red flags speeds things up. Messy credit or complex finances adds more underwriting time.

• Type of loan – Conventional loans are often faster than government programs like FHA or VA loans.

• Appraisal timeline – If there are appraisal delays or issues with the property condition, it can hold up approval.

• Your lender’s workload – Lenders with lots of business may take longer to process your application and underwrite the loan.

So while most borrowers get approved in 30-60 days, it pays to be prepared for the process to potentially take longer. Maintaining good contact with your lender about progress and timelines is key.

Tips for a Faster Mortgage Approval

If you want to try to get approved for a home loan as quickly as possible, here are some tips:

• Get pre-approved early – Having this ready cuts off 1-2 weeks at the start of the process.

• Provide documents upfront – Being responsive to lender requests prevents delays during underwriting.

• Limit new credit inquiries – Adding new accounts can raise questions and slow things down.

• Stay employed – Changing jobs mid-process often causes hiccups or delays.

• Maintain your current finances – Don’t make big purchases that alter your credit/debt profile.

• Research lender timelines – Some have quicker underwriting departments than others.

• Stay organized & responsive – Missing paperwork is one of the biggest holdups.

• Build a relationship with your loan officer – They’ll help advocate and expedite your application.

While getting approved quickly is ideal, it’s not always possible due to the factors involved. Be prepared for an approval process that takes the full 30-60 days or longer. Maintaining contact with your lender and staying patient throughout the documentation collection process is key.

Ready to Get Started?

Now that you know the typical mortgage approval timeline for 2020, you can start preparing your application. The more organized you are upfront, the smoother the process will be. If you have any other questions about timelines or getting approved, don’t hesitate to reach out. I’m happy to help explain the steps and set expectations so you can get into your dream home as quickly as possible!