How long does it take for a mortgage decision to be made?
If you are just looking for an answer as to how long it takes the bank to make the decision as to whether or not to lend. It is typically made immediately. Automated or computerized underwriting took the place of human decision making long ago. As soon as you tell your lender what you make, how much you have in the bank, and they pull your credit, they know whether or not to proceed. The job, income, and asset paperwork that follows the initial trip to the bank, which pushes the whole process to 2 or 3 weeks, is merely the bank verifying the information they plugged into the underwriting system. If you are not planning on putting 10-20% down- you’ll most likely be going through FHA- which requires a 3.5% down payment, a 580 minimum FICO, and a max DTI of 50% – if you fit those requirements you have a good shot of getting approved.
It depends, honestly, on what paperwork is actually completed and what you mean by a “decision.” I don’t mean to sound like a politician here, but there are mutliple definitions at work in the lending business. If you completed just the loan application and Borrowers Authorization (to pull your credit), then the broker should be able to tell you within minutes if you’re pre-approved, but this doesn’t constitute a loan approval and does not go to an underwriter for review. This would be a pre-application and pre-qualifying. If you have a home under contract and have completed all the disclosures, then the broker has the option to send it to underwriting for credit approval or to hold your paperwork until the remainder of the documents are in. If it wasn’t submitted to underwriting, then you’re not waiting for a decision, per se, but you’re waiting for the rest of the documents. If it was submitted to the underwriting team, it would probably take 3-4 days. This would be an application an
I would recomend that you speak with your bank about the time for an answer. Most banks are different in the amount of time it takes for a final approval. It also depends on many things, such as the long list of people that sent in their application before you. Most banks do it in the order that they are recieved. Secondly it depends on what type of deal was put together between you and the bank. Banks tend to like bigger percentage deposits on loans. So best advice talk to your underwriter.
