Timeline for Closing on a Home

According to ICE Mortgage Technology, the average timeline for closing on a house is 50 days. After the closing process, it can take less than two months to become a new homeowner. However, closing on a home is separate from closing on a loan, which can take an average of 47 days. Closing on a loan means your loan is finalized, and the funds can be distributed, often coinciding with closing on a home.

The average timeline for closing on a house can differ based on the type of loan you get. Some loan types you can opt for include a Federal Housing Administration (FHA) loan, conventional loan or Veterans Affairs (VA) loan.

Across FHA, conventional and VA loans, it takes borrowers an average of 47 days to close on a loan. However, this timeframe has varied over the past few years. In May 2020, it took an average of 45 days to close on a loan, steadily increasing to a peak of 58 days in December 2020 before returning to 47 days in September 2021.

Source: ICE Mortgage Technology 2021 Origination Insight Report

An FHA loan, issued by the Federal Housing Administration (FHA), is a mortgage insured by the FHA, which is part of the Department of Housing and Urban Development. Generally, FHA loans originate from private lenders but are insured by the FHA, which often leads to more favorable rates as there is less risk on the lender’s part.

As of September 2021, FHA loans take about 52 days to close. However, between May 2020 and September 2021, 62 days peaked in December 2020, and the lowest was 46 days in July 2020.

Source: ICE Mortgage Technology 2021 Origination Insight Report

Conventional loans are mortgages from private lenders, such as banks or credit unions. It’s the most common financing option for first-time homebuyers, where rates, terms and requirements vary based on the lender — affecting the closing timeframe.

The average timeline for closing on a house with a conventional loan stands at 46 days, which is the most recent data from September 2021. The average has risen and fallen tremendously between May 2020 and September 2021, reaching a high of 57 days in December 2020 and a low of 45 days in August 2021.

Source: ICE Mortgage Technology 2021 Origination Insight Report

A Veterans Affairs (VA) home loan is a mortgage meant solely for military members, veterans and surviving eligible spouses. Like FHA loans, a VA loan is issued by private lenders but insured by the U.S. Department of Veterans Affairs. They have less stringent requirements, as they only serve a specific population.

VA loans take roughly 53 days to close, the longest amongst FHA and conventional loans. The average has steadily increased since May 2020, starting at 49 days. In January 2021, however, the average time to close on a VA loan was at an all-time high of 66 days — just over two months.

Source: ICE Mortgage Technology 2021 Origination Insight Report

The timeline of closing on a home depends on each step of the process, including application and waiting for the release of the funds. If you’re interested in a home and others are interested in buying the same home, and making a higher offer, be prepared for a “bidding war,” which can also prolong closing. If applicable to you, this can take place before or after your application for a mortgage, as a pre-approval letter is not required to make an offer.

Understanding the process and having a gist of the timeline can help you plan for the home of your dreams.

Purchasing and closing on a home is an exciting endeavor. Knowing the timeline for closing on a home is crucial to help you plan and feel secure in your decision. Learn more with MoneyGeek’s answers to some of the most frequently asked questions about closing on a home.

Learn more about the homebuying process through MoneyGeek’s other resources.

• Understanding Mortgages, Home Loans, Refinancing & More: Learn financing options to buy a new home.
• Finding the Best Lender: Questions to Ask Mortgage Lenders: Determine the necessary discussion topics with your potential mortgage lender to ensure you’re getting the best deal.
• Mortgage Interest Rates: History & Trends: Get an overview of mortgage rates in the U.S. over the years.
• Most Common Terms Used in Mortgages & Loan Processes: Avoid being confused by home loan jargon using MoneyGeek’s glossary of terms.
• Is Homeownership For You? A Guide for First-Time Homebuyers: Determine whether buying a home is the right decision based on your circumstances and future goals.