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You may be wondering how long banks take to do a mortgage?  Let me start with this, it is rare that a mortgage falls apart.  Most lenders give out good pre-approval letters and 99% of the loans close on time.  I would say the average longest time is 45 days.  It is very rare that it takes longer than that.  If it takes longer than that....either the bank is no good, or there are issues with underwriting.

Let's talk about the mortgage process.  In our purchase agreement there are usually three mortgage dates.

  1. Date to start the mortgage.  Usually the buyer has 5 days to get the mortgage started
  2. Date to get a firm commitment.  Usually the buyer has 45 days to get the mortgage done
  3. Closing date.  A date that the buyer puts on the purchase agreement and we agree to.

 All of these dates are general dates or target dates.  Michigan real estate law will not let you the seller cancel the contract if the buyer misses these dates so long as the buyer is making a good faith effort in getting the loan done.  So if the closing date was March 5, you cannot cancel the loan on March 6th if the buyer is trying to get the mortgage done.

What that means to you the seller is that you have to have patience and have to wait until the mortgage gets done.  Add in that we very seldom can get good information on what is going on with the loan.  We can't find out whether it is going good or bad because of today's privacy laws.  We may get a general idea but many times we will not know what is really happening with the loan.

I do a weekly check in with the mortgage company, and towards the last three weeks I start asking if we are going to meet the target closing date.  Here is the rough mortgage time line.  The first week after the purchase agreement is signed the buyer starts the mortgage paperwork.  After the home inspection they usually order the appraisal.  (They wait that long because the buy does not want to spend money on an appraisal if the home inspection falls apart).  Then we wait for the appraiser to come out and to send the appraisal back in.  It is usually about the 3rd or 4th week before it is in. During this 1st week and the appraisal period we are just waiting on the bank.  Once the appraisal is in the bank goes into full gear.  Once again we are in a hold pattern until the bank has fully approved the mortgage.  Then bank issues a clear to close.  At that time I call you the seller, and the buyer agent is calling the buyer.  We arrange a mutually agreeable time to close.  Then we usually close any where from 2 to 7 days after the clear to close.

Bottom line is that you have to have patience during the mortgage process.  All we will know really is that they are working on the mortgage, when the appraisal is ordered, and when it is completed.  Other than that we are in a hold pattern and in the dark waiting on the bank to finish up.  It all boils down to which lender the buyer has picked.  There are some lenders that can get a mortgage done in 20 days, but the majority of them take close to 45 days.

You have to have patience when dealing with a bank.  Usually you cannot push them faster until they are past the 45 day mark.  They move at their own pace.  No amount of calling, screaming, or yelling will make them move faster.  So figure on 45 days and sit back and relax. 

I hope this gives you an idea of how the mortgage process works and that you cannot cancel a purchase agreement even if the bank and buyer is taking a long time.