It generally takes several weeks to close on a home purchase loan or refinance. Lenders analyze your income, assets and credit, as well as your home's value during the mortgage underwriting stage. If you're seeking a mortgage insured by the Federal Housing Administration, expect a similar time frame. That's because traditional mortgage lenders -- such as banks, credit unions, mortgage brokers and online lenders -- make the loans, rather than the FHA. You can track your loan file's status online or by contacting your loan officer.
FHA Loans Require Thorough Analysis and Documentation
To minimize a lender's risk, the FHA provides the lender with an insurance policy in case you default. FHA loans can have a higher rate of default due to the low down payment requirement of 3.5 percent and the FHA's flexible eligibility criteria. The government-backed loans allow for lower credit scores and higher debts loads than most conventional loans.
Before issuing the FHA mortgage guarantee, lenders analyze your application and supporting documents as carefully as they would a conventional loan. The FHA loan origination process lasts between two weeks and six weeks, depending on the complexity of the loan file and the expediency and accuracy of the information you supply the lender.
Check Loan Status Online
Many large lending companies that originate FHA loans allow you to track your application's progress online. These lenders include:
Upon submitting your application with a lender, the lender provides an application identification number and password to access the portal. Applicants with existing accounts and a username and password may access their general customer profile and view the status of a pending FHA loan application, depending on the lender.
Main Points of Contact
An FHA mortgage lender assigns a loan officer to take your initial loan application. This loan officer acts as a liaison between the lender and the customer throughout the entire transaction. The loan officer typically follows up with you when more information is needed, such as current pay stubs, employer information, or to clarify any discrepancies between your application and your supporting documents. You can also instruct a loan officer to call or email you with updates, for example, on a weekly basis. Likewise, you can provide your loan officer with any new information that might change your loan eligibility, for better or for worse. For example, this might be a change in your financial circumstances, such as an increase in your reserves for a higher down payment, or a pay cut or job loss.
Lenders employ loan officers to answer more complicated applicant questions concerning interest rates, loan programs and financial concerns. However, loan officers sometimes pass logistical questions, such as inquiries about FHA application status, to an assistant, known as a loan processor. A loan processor gathers and logs all supporting documents in the system and helps the loan officer get the file through underwriting to funding, more efficiently. Depending on the mortgage company, loan processors may be allowed to communicate directly with the public to provide status updates.
Check the Lender's Track Record
Find out how FHA lenders plan to keep you updated throughout the application and underwriting process, before agreeing to give a lender your business. Ask for a main point of contact, or two, and obtain their hours of operation, direct phone number, fax number and email address. Also ask a loan officer for references from past clients. Ask past customers about their experience with the loan officer and how well they were kept in-the-know about their FHA loan's status.