3 Stages of Loan Approval Prequalification, Preapproval & Loan Approval

If you're thinking about buying a home, you might wonder how long the process takes.

The first step in buying a home is going to be pre-qualification:

This is where you'll complete an application that's going to ask you questions about income assets and credit, I will then get that application and give you feedback on loan type down payment options, rate, payment, all of those kinds of things. Typically, I'm able to turn around a pre-qualification in about 24 business hours.

The next step is pre-approval:

This is where I would take the information that you've provided verbally about your employment history, what you make, how much you have in the bank, we'll go ahead and get the documentation to match up to that, then we will take that information, and one of our underwriters will review it to make sure that everything is ironed out before you even go under contract, that process tends to take about a week. It's helpful to do that before you put a home under contract because it just makes sure that any bumps in the road we get smoothed out and we have a clear confident path forward that helps your offer stand out because it lets the seller know that your loan is sitting there waiting for you to find a home.

The third step is you're under contract congratulations:

What we will do is we'll be able to lock your rate and then we'll send you property-specific disclosures and be underway with the processing and underwriting of your file. We will order title work, we will get the appraisal ready and we'll do the final underwriting of your loan providing final loan approval. So then you can close that process and it takes anywhere from about 30 to 45 days.

A common question is How long does a pre-qualification and a pre-approval last? Both of those processes tie back to the credit report for an FHA loan, that credit report is valid for 90 days. And then for a conventional loan, it's valid for 120 days. So you'll want to start this process somewhere between one to two months before you're ready to put a home under contract to make sure that everything is laid out ready to go.

The takeaway is we really take a lot of pride in doing things the right way and taking time to do as much upfront work as possible to take away the stress once you're actually under contract. If you want to discuss what options you have and your timeline, please give me a call.