How Long Does It Take to Close a Home Loan in a Hot Market?

Even though inventory in many markets was at its lowest levels in 40 years, and COVID-19 has managed to affect everything from education to employment opportunities, demand for homeownership is still on the rise.

Some would say it’s because of the rising cost of rent, others say it’s due to interest rates on home mortgages declining to its lowest level on record, and there are those who point to one of the biggest drivers of home buying… children. So, although unemployment hit an all-time high (14.70% in April of 2020 vs. National average 5.76%), many Americans have chosen to get into the home purchase market.

With the Real Estate market on fire, if you’re a realtor in today’s environment, you may have experienced some feelings of uncertainty when it comes to your favorite lender. It could be because you feel the communication isn’t as frequent as you’ve been accustomed, the processing & underwriting turn times seem to take longer, and or the closing packages are not arriving to the title company days before as normal.


There is a chance that one or all the above is happening. It starts with the fact that there is still a shortage of certified home appraisers in the market and ends with overall capacity with the lender. Hundreds of thousands of refinance applications are flooding the appraiser’s desk (on top of all the purchase requests), and home appraisers are slammed with more work than they can handle. That means from the start of the home financing process, the length of time it takes to close on a home purchase has been extended due to appraisal turn times lengthening. Adding to the problem is all the temporary changes in lending guidelines and requirements related to COVID-19. A once easy 3 week close is now taking 4-6 weeks.


In my humble opinion, buyers and sellers need to be on the same page when it comes to closing expectations. That starts with the realtors on both sides of the table educating the buyer and seller on the new potential closing timeline. Can a closing happen in 30 days or less? Yes. However, if we under promise and over deliver, all parties walk away happier when the home loan closes. So instead of filling out a purchase agreement with a 3 week or 30 days close, set the expectation of it closing in 35-45 days. If it closes sooner, all parties involved look like heroes.

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