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Hi, I'm Ella Gurfinkel, your host of the AskElla Show and senior loan officer at Fairway Independent Mortgage. On my podcast, I cut through the noise to bring you honest conversations about real estate, mortgages, and financial planning.
I interview industry experts to tackle everything from homebuying basics to complex topics like reverse mortgages, trusts, and market trends. With decades of experience, I'm passionate about dispelling myths and providing clear, actionable advice.
Whether you're buying your first home, refinancing, or planning for retirement, I'm here to help you make informed decisions. Join me for straightforward talk about real estate and beyond!
why does it take 20 or 30 days or even longer sometimes to close on your home purchase loan if you're wondering why the heck it take so long to close on a house stop what you're doing because today I'm going to take you behind the scenes and show you exactly what's happening during those 30 days and why rushing it could cost you your dream home Welcome Hi there I'm Ella Gerfinkle senior loan officer with 30 years of experience and over 2,000 families served And today we're pulling back the curtain on the closing process Don't like or subscribe yet please Let's see what really goes into getting you those keys And let me start with a story that happened just last week A client called me freaking out because another lender promised them a 15-day close Sounds amazing right well that lender could not deliver and my client almost lost their earnest money Now here is what really happens during the closing process Let's talk about it Days one through three those are critical days for the setup of your loan First of all your loan application gets finalized between me your loan officer and yourself And that's when everything gets pushed from my desk figuratively from my computer to the rest of the team on the back end Basically the wizards behind the curtain at Oz We send their initial disclosures We order your appraisal We get title work ordered But what nobody tells you and that's why our messages are so urgent at that point in time is that if you don't get those disclosures signed and back to us as soon as humanly possible everything literally stops I've seen many a time those 3-day delays just because someone didn't check their email Now let me tell you we love you our clients We absolutely love you but it's not always possible for us to plead babysitter and tell you that the disclosures have gone out because frankly we want to treat you like adults and we rely on you checking your emails So yes nowadays we're relegated to playing babysitter a lot more when we actually will text you and let you know to check your email because the disclosures are out But 90% of the time the ops people on the back end those amazing support people that we all rely on they are a machine They can't stop what they're doing to remind everybody to do their part of the job As harsh as it may sound next phase of the transaction days 4 through 14 Now mind you this could be the time when you're still working on your inspections and you're still negotiating some of the inspection pieces Great But my wheels the loan wheels do not come off the bus because you're still inspecting the house Our wheels are turning because your 30-day close per contract if that's what your contract calls for we still have to adhere to them and we still have to close you on time So if we're missing time here it means we have to make that time up somewhere else And there is usually not that much time to make up throughout the process So this next phase is basically your documentation phase We verify your employment We verify your assets The appraisal hopefully comes back to us But in the meantime even before the appraisal comes back once we verified your employment and you do have the money for the down payment and closing costs hopefully the seller is paying for them But that's for another conversation That's when everything gets packaged with a bow as I say and gets sent on to the next phase and to processing and then to underwriting So the goal is typically that before the appraisal actually even gets done we already have your file reviewed by underwriter and a conditional approval issued Now let me talk a little bit about the employment verification process Even if you've been at your job for 20 years we still have to verify it And not only do we have to verify that you've been at that job for 20 years we also have to verify what you have been paid in the last two years plus year to date Again rules of thumb And we also have to verify that your income is stable And some employers only respond to verification requests once a week Some will take a while to get back to us And not everything is still electronically obtainable So that alone can add days to your closing It adds days in between the process It's going to add days at the end Next phase days 15 through 22 Your file has come out of underwriting Your conditions come back We clear those conditions Let me explain to you what conditions are Your documentation your financials that were sent off for effectively sign off and review have been at this point reviewed and looked at by the underwriter It's another licensed professional behind the curtain behind the scenes who has to verify that everything we have collected from you collected from third parties actually corresponds and satisfies the guidelines and requirements of the loan type that you're getting so that we on the mortgage side can actually sell your loan Meaning the loan can be funded by whether it's Fanny May Freddy Mat for conventionals or the investors who quote unquote buy the loans when it's anything else This person goes through literally everything that we have supplied They verify that your income is in fact stable and is not variable They actually go through your bank statements line by line believe it or not and they will question certain things on for example your bank statements Is your bank statement showing large deposits and what are large deposits large deposits are different for everybody There is no rule of thumb uh across the board or one sizefits-all It's the deposits that are typically more than 50% of your monthly income There may be some irregularities with your bank statements There may be quote unquote undisclosed debt Companies like a firm for example do not report to the credit bureaus Not always but the underwriter may notice recurring payments coming out of your bank accounts to something like a firm So yes the deep dive into your financials is that deep In fact that's why if you've seen my videos before you have heard me say that getting your loan through underwriting or buying a house is akin to getting a freaking proctologology exam financially because yes the underwriter does crawl up every single crevice and every nook and cranny of your financials So when they have reviewed what we have provided with your assistance they now go back and send us a new list of items that we need to provide in order to finalize the approval So conditional therefore conditions conditional approval Now we have the approval conditions that we get back to you with and that's what happens in this next to last phase Now the common misconception is and I've run into this actually lately quite a few times is where when we tell somebody they're conditionally approved they kind of rest on their laurels and at that point decide that oh we're done We're good Ah hell no Conditional approval means that there is still additional stuff that we need to get from you And again that stuff could be minor That stuff could be major But here's the kicker Sometimes the additional stuff you provide will trigger more stuff to be asked for So sometimes it does become a chain reaction and it's not that simple Just because you provided something doesn't necessarily mean that you're once again done It ain't over until a lady sings and until the underwriter actually has signed off on everything and now you've gotten into the clear to close phase But that's coming next Days 23 through 28 the final steps The clear to close is issued if and only if all of the underwriting conditions have been satisfied If and only if the appraisal came back without repairs without any issues with the property without any health and safety stuff you've already in the prior period have signed your initial closing disclosure That's what trips up the 3-day waiting period Now if you haven't signed the closing disclosure the initial one essentially look at as a rough draft Now you may be looking at a 3-day delay before you can actually close on your loan Assuming all of that is done and all of that is in the clear Your final documents get prepared Just because you think you're done because we have a clear to close And this is where it's probably my pet peeve favorite pet peeve is where everybody calls when can I sign can I go to escro now can I sign my documents now essentially are there yet version of the adults buying a home no not quite It may seem like it's super simple Hit the button push the final documents loan documents to the escro company or attorney's office to sign Well it ain't that simple yet In the process of preparation of the final documents our funders our department that is actually working on the final documents and your final loan funds to be sent to escrow or attorney's office they actually have to not only get in touch with the escro company or closing attorney working with us but also balance the final numbers because when the documents get done we also need to tell everybody how much money you need to bring to the table And the only way to know how much money you need to bring to the table And sometimes this back and forth between the funer and the closing office is not a one-shot deal Sometimes it's going back and forth and figuring out where discrepancies are Even if it's pennies everything has to balance to the tea Now it becomes a matter of accounting It also becomes a verification of how title is to be held So that back and forth is not always up to us It's also up to this third party being the escro office or closing attorney's office and depending on how long they will take will drag out how long it will take to get the documents out Now typical turn time for getting the docs out is 24 to 48 hours Let's say all of that got done and the documents got pushed out to closing days 29 and 30 Your closing final documents are signed Our funds get wired meaning from the lender side your mortgage Your funds get brought in only after that the loan is usually released to record and you can get your keys But let's talk about the things that can slow us down in the process Self-employed buyers need extra documentation Property issues those come up during appraisal lately quite a bit As a matter of fact title problems that need to be clearing I'll give you an example I actually am in a transaction right now with a client who upon receiving their title report discovered that there was a possible judgment against his wife Well on further digging her name was similar to somebody else but it could have tripped us up and it could have taken the extra time Employment changes Please please please please please do not change jobs when you're in the process of buying a home new debt shows up on credit Cuz guess what just because we pulled your credit report at the beginning you're not in the clear Let me tell you you are not in the clear at all Because throughout the loan process we're verifying that you haven't incurred new debt that you're not getting new inquiries on your credit report because we'll have to verify what they're for what the payment is etc Let me give you another example We were in the process of closing a transaction for a client just a couple of weeks ago when we got majorly derailed when the tax transcripts were pulled Yes self-employed buyer with multiple businesses Love him to pieces great client we've done multiple transactions together This one threw me for a loop Tax transcripts were pulled and it was discovered that there is a pretty sizable chunk of IRS taxes that are owed reached out to the buyer turns out that he's on a payment plan Well we do have to incorporate that payment plan into the bigger picture So that by itself caused a twoe delay in the process of the loan while we were rolling with the punches figuring and refiguring out on how to address the IRS payment plan and still maintain a loan approval because it was a sizable monthly payment because nobody consulted with us obviously before the payment plan was established and how it was going to affect the loan That happened in the transaction not before There is unforeseen stuff that comes up all of the time Or another example an appraiser threw us a curveball on a purchase in Georgia where the appraiser thought it was a bat in the attic of a home Not kidding took a picture of what he referred to as a bat except for I'm sorry a bat sitting upright on a sill of what appeared to be a window which was really more of a air intake in the attic in broad daylight It took us days and going up the food chain and getting my corporate involved to overturn the appraiser's comment that it was a bat and therefore extermination services were needed because again have you ever seen a bat sitting upright in broad daylight on the bottom sill i haven't Anything and everything during the transaction can be addressed Where there's a will there is a way But I know some of us have heard horror stories and some of us come through with absolutely stellar results There are certain things throughout the process of the loan that frankly you can't control and neither can I You know I'm a lot of fairy dust I just can't snap my fingers and click my toes and get you to the finish line Rushing the process is not necessarily the best thing But that said if you are on top of your financials if you have provided everything upfront to us or if throughout the process issues come up we can tackle them The fastest you can get us what we need the faster we will overcome those issues and challenges Can we close loans in 10 days or 15 days the answer is yes and hell yes And yes we do those routinely But it's not for everybody and for every transaction to close in 10 to 15 days And even on a 30-day closing delays come up mistakes happen third parties intervene i.e appraisers or title and escrow The required waiting periods can get violated We're required a 3-day waiting period here there and everywhere throughout the process So could you end up not closing at all possible My goal is to not let that happen My goal is to get you across the finish line with as little stress as possible but the delays do happen And all I'm trying to do is just explain why sometimes it takes longer to close on a loan than the normal 20 or 30-day timeline Now what is the biggest mistake that I see people choosing a lender based on the promise closing time rather than actual ability to close That 15-day close promise means absolutely nothing if they can't actually do it So here's what you really need to know about closing times 30 days is honestly normal and healthy 45 days it gives everybody a lot of breathing room but in a competitive market it may not be something you want to do 60 days might be needed for complicated situations meaning multiple tax returns that weren't reviewed up front potential tax liabilities or property issues or you may be getting a home equity line of credit on one house to fund the next purchase Ask for a longer closing just to be on the safe side not to create more stress for yourself and allow all the parties involved enough room to work Anything under 20 days a little risky but doable Usually we'll say we can close in under 21 days Pretty much only to win you the house and only if you have fully cooperated with us helping us help you get your pre-approval done in the best fashion possible Now from the bottom of my heart I want your closing to go smoothly again I can't stress it enough Even if it takes a few extra days but to avoid the delays book a free consultation Use the link below We will create a realistic timeline for your specific situation cuz there are no two situations that are alike Now that you understand what really happens during those 30 days if you found this helpful please like and subscribe and I'll see you in the next one [Music]