FHA Home Loan Timeline

If you are a first-time buyer in the market for an affordable home loan, chances are you have heard of FHA loans. This type of mortgage offers qualifying homebuyers numerous benefits, including low down payment options.

But how do these loans work and what is the timeline between pre-approval and closing? In this article, we will dive into the details of the FHA loan timeline so you know what to expect and can determine if an FHA mortgage is right for you.

How long does it take to get an FHA loan? (1-2 months)

In most cases, you can expect the FHA loan process to take up to two months from pre-approval to closing. While there is not much you can do to speed up the timeline, it is important to know the steps involved and the time each takes to complete so you can avoid making any mistakes that may cause delays. Here are the steps it takes to close on an FHA loan and the time each one will take to complete:

How long does a home loan application take? (30-60 days)

From pre-approval to closing, the average home loan application takes 30-60 days to be approved.

How long does mortgage pre-approval take? (7-10 days)

On average, it takes seven to ten days to be pre-approved for an FHA loan. However, gathering your required documents and handing them in all at once can help speed up the process.

Once you confirm with your mortgage lender that you qualify for an FHA loan, you will submit your mortgage application for pre-approval. Your lender must verify all of your financial information and perform a hard credit check to ensure you are able to afford the home loan. Note: Most pre-approval letters have an expiration date. Depending on your lender, you will have between 60 and 90 days to find a home and have the residence approved by an FHA inspector.

How long does it take to receive your loan estimate? (3 days)

Three days after they receive your loan application, the lender will be required to provide you with your loan estimate. It will be a three-page document that contains important details such as your anticipated down payment, interest rate, monthly payment, and total closing costs. This will give you the chance to crunch the numbers and double check that you are able to afford the up-front costs and monthly payments. With this information in hand, you can begin your search for the perfect home!

How long does the home inspection and FHA appraisal take? (2-4 weeks)

It will take about two to four weeks to schedule and complete the FHA inspection and appraisal of the home, though the inspection itself will only take a couple of hours. The FHA has strict standards when it comes to the condition of the property you are purchasing with the loan. These property standards are meant to protect you from buying an unsafe or unfit property. Your lender will hire an FHA inspector who is trained to look out for specific safety and durability issues, as well as perform a traditional appraisal to estimate the home’s current market value.

Your FHA loan will not be approved until the inspection is complete and confirms that the property meets all of the requirements. However, there are two possible scenarios in which your timeline can be derailed:

• The home’s appraisal value is lower than your offer amount. In this case, you will have to pay the difference yourself, negotiate with the seller for a lower sales price, or walk away from the deal.

• The home does not meet FHA standards and does not pass the inspection. Not all underlying issues in a home are apparent, and if the inspector finds any, they must be fixed in order to get a loan approval. If the seller is not willing or able to make the repairs, then you may have to walk away from the deal and start the house hunting process again.

It is important to note that if any issues do arise during the inspection, the FHA allows up to 120 days for repairs to be made.

How long does it take close on a house? (4-6 weeks)

Once you have found a home you love (that passes the FHA inspection and appraisal) it will take about four to six weeks to close. Your mortgage application will move into the underwriting phase, in which all documentation is reviewed by an underwriter and they will inform you if there are any issues. If everything looks good, your loan will be approved.

How long does the underwriting process take? (1 week)

You can expect underwriting to take about a week if there are no issues present. Once your loan approval is confirmed, you can move on to signing the paperwork and closing on the home purchase. On closing day, it will take a few hours to finalize the details and sign on the dotted line.

Is an FHA loan right for you?

Determining which type of mortgage is right for your needs is a very personal decision. Many borrowers find that FHA loans are great for helping them purchase their first home. However, as with any other type of home loan, it takes time to move through the entire homebuying process.

Knowing what to expect and understanding the timeline will go a long way in ensuring you have a smooth homebuying experience. Be sure to talk with a trusted mortgage expert for a better idea of how your dream of homeownership can become reality.