VA loans are a valuable resource for veterans, active-duty service members, and their families, offering benefits such as no down payment and no private mortgage insurance (PMI).
One of the most frequently asked questions from prospective VA borrowers is: How long does it take to close on a VA loan? Understanding the process, factors that affect closing time, and what you can expect will help ensure a smooth homebuying experience.
In this comprehensive guide, we’ll explore the steps involved in closing on a VA loan, current trends in the housing market, and the typical time it takes to close, backed by data and expert insights.
Table of Contents
What is a VA Loan?
A VA loan is a government-backed mortgage program available to veterans, active-duty service members, and certain members of the National Guard and Reserves. These loans are guaranteed by the U.S. Department of Veterans Affairs (VA), which makes it easier for eligible borrowers to secure favorable loan terms.
Key benefits of VA loans include:
- No down payment required
- No private mortgage insurance (PMI)
- Competitive interest rates
- Flexible credit requirements
Average Time to Close on a VA Loan in 2024
According to the Ellie Mae Origination Insight Report, the average time to close on a VA loan in 2024 is around 55 days, slightly longer than the time it takes to close on a conventional mortgage, which averages around 48 days.
However, it’s essential to note that various factors can influence the closing timeline, including the borrower’s financial situation, appraisal results, and lender efficiency.
Typical Timeframes for Different Types of Loans
| Loan Type | Average Days to Close (2024) |
|---|---|
| VA Loan | 55 days |
| Conventional Loan | 48 days |
| FHA Loan | 52 days |
While these averages provide a general idea, the actual time to close on a VA loan can vary depending on the individual circumstances of each borrower and the local housing market conditions.
Factors That Influence VA Loan Closing Times
While the average time to close on a VA loan is around 55 days, several factors can cause the process to speed up or slow down. Here’s what you need to consider:
1. Pre-Approval Process
- Pre-approval involves a lender evaluating your financial health, including your income, debt, and credit score, to determine how much they are willing to lend you.
- Getting pre-approved before house shopping can save time, as you’ll already know how much you qualify for and can make an offer on a home quickly.
2. Appraisal
- The VA appraisal is one of the most significant factors in the timeline. A VA-certified appraiser must evaluate the property to ensure it meets the VA’s Minimum Property Requirements (MPRs) and determine its fair market value.
- Depending on the location and the availability of appraisers, this process can take anywhere from 10-20 days. Delays in the appraisal can extend the closing timeline.
3. Credit and Financial Review
- Your credit history and financial documents will undergo a thorough review. If there are any discrepancies or missing documents, this can delay the approval process.
- For borrowers with more complex financial situations, such as self-employed individuals or those with high debt-to-income ratios, this step may take longer.
4. VA Loan Underwriting
- Underwriting is the process in which the lender assesses the risk of the loan. The underwriter reviews your financial documents, the appraisal report, and ensures that the loan complies with VA guidelines.
- The underwriting process can take anywhere from 5 to 15 days, depending on the complexity of the loan and the efficiency of the lender.
5. Title Search and Insurance
- A title search is required to ensure that the property has a clear title, free of any liens or legal claims. This step typically takes 1-2 weeks.
- During this time, the lender will also require you to purchase title insurance, which protects against future claims on the property’s ownership.
The VA Loan Closing Process: A Step-by-Step Breakdown
Here is a typical breakdown of the VA loan closing process, from start to finish:
- Loan Application (Day 1-3)
- Once you’ve selected a lender and found a home, you’ll begin the formal loan application process. The lender will gather necessary financial documents such as pay stubs, tax returns, and bank statements.
- Pre-Approval and Offer (Day 4-10)
- If you haven’t already, the lender will issue a pre-approval letter. You can now submit an offer on a property. Once your offer is accepted, the formal loan application process continues.
- VA Appraisal (Day 10-30)
- A VA-certified appraiser will visit the property to ensure it meets the VA’s MPRs. Delays in scheduling an appraiser can sometimes extend this step.
- Underwriting (Day 30-45)
- The underwriter reviews all documents, including your financial records and the appraisal. If the underwriter needs additional information or documents, this step can take longer.
- Title Search (Day 45-50)
- The lender will perform a title search to ensure the property has no liens or legal claims.
- Final Approval and Closing (Day 50-55)
- Once all conditions have been satisfied, the loan is given final approval. You’ll attend the closing meeting to sign the necessary documents and receive the keys to your new home.
Step-by-Step Table: VA Loan Closing Timeline
| Step | Timeframe | Description |
|---|---|---|
| Loan Application | 1-3 days | Submit formal application to lender. |
| Pre-Approval and Offer | 4-10 days | Receive pre-approval and submit an offer on a property. |
| VA Appraisal | 10-30 days | VA appraiser assesses the property’s value and condition. |
| Underwriting | 30-45 days | Lender reviews documents and approves the loan. |
| Title Search and Insurance | 45-50 days | Ensure the property’s title is clear of legal claims. |
| Final Approval and Closing | 50-55 days | Final approval, sign closing documents, and receive keys. |
Current Housing Market Trends and How They Impact Closing Times
The housing market in 2024 is experiencing unique challenges that can affect the time it takes to close on a VA loan. Here are some current trends that could impact your closing timeline:
1. Inventory Shortages
- Low housing inventory continues to be a challenge, driving up home prices and increasing competition for available properties. This can slow down the process as buyers may need more time to find a suitable home.
2. Rising Mortgage Rates
- Mortgage rates are fluctuating, with VA loan rates averaging around 6.15%. This is still competitive compared to conventional loan rates, which hover around 6.50% to 7.00%.
- Higher rates may lead to more scrutiny from lenders, which could impact underwriting times.
3. Appraiser Shortages
- In some regions, there is a shortage of VA-certified appraisers, causing delays in the appraisal process. This is particularly true in rural areas, where the availability of appraisers can be limited.
4. Increased Regulatory Scrutiny
- Changes in lending regulations and compliance requirements could slow down the underwriting process as lenders take extra care to meet federal and state regulations.
Expert Insights on VA Loan Closing Times in 2024
Mortgage experts agree that while VA loans may take slightly longer to close than conventional loans, the benefits often outweigh the additional time.
Michael Davis, Senior Mortgage Advisor at Patriot Home Loans, says, “While the average VA loan takes around 55 days to close, many borrowers can speed up the process by being prepared with all necessary documentation from the start. It’s important to work closely with your lender and ensure there are no gaps in the paperwork.”
Another expert, Emily Rogers, a VA loan specialist with Veterans Home Funding, adds, “The appraisal process can be the biggest variable in VA loan closings. In competitive markets, it’s essential to schedule the appraisal as soon as possible to avoid delays.”
How to Speed Up Your VA Loan Closing
While some aspects of the VA loan process are beyond your control, there are a few steps you can take to help speed up the process:
- Get pre-approved before shopping for a home: This can save valuable time once you find a property.
- Provide all necessary documentation upfront: Submit all financial documents and paperwork as soon as possible to avoid delays in underwriting.
- Communicate frequently with your lender: Stay in touch with your loan officer to ensure that all steps are proceeding on schedule.
- Be prepared for the VA appraisal: Work with your real estate agent to ensure the property meets the VA’s Minimum Property Requirements, which can help avoid appraisal-related delays.
How Long it Takes to Close on VA Loans FAQ
1. How long does it take to close on a VA loan in 2024?
On average, it takes about 55 days to close on a VA loan in 2024. This is slightly longer than conventional mortgages, which typically take around 48 days. The time frame can vary depending on factors such as the appraisal process, underwriting, and title search.
2. What can cause delays in closing on a VA loan?
Several factors can cause delays, including:
- The VA appraisal process, which can take 10-20 days depending on the location and appraiser availability.
- Incomplete documentation from the borrower or discrepancies in financial information.
- Underwriting delays, especially if the borrower’s financial situation is complex or requires additional verification.
3. Can I speed up the VA loan closing process?
Yes, you can take steps to speed up the process, such as:
- Getting pre-approved before you start shopping for a home.
- Providing all necessary financial documentation early in the process.
- Staying in close communication with your lender and real estate agent to ensure there are no delays.
4. Is the VA appraisal process longer than for conventional loans?
The VA appraisal process can take longer than conventional loans, especially in areas with a shortage of VA-certified appraisers. This is a common reason why VA loans may take longer to close.
5. Why does a VA loan take longer to close than a conventional loan?
VA loans typically take longer to close due to the additional steps involved, such as the VA appraisal, underwriting reviews, and ensuring the property meets the VA’s Minimum Property Requirements (MPRs). The VA’s additional guarantee process also adds some time.
The Bottom Line
Closing on a VA loan typically takes around 55 days in 2024, slightly longer than conventional mortgages. Factors such as the VA appraisal, underwriting, and the complexity of your financial situation can impact the timeline.
While VA loans may take longer to close, their benefits—such as no down payment, no PMI, and competitive interest rates—make them an excellent option for eligible veterans and military personnel.
By preparing your documents in advance, staying in close communication with your lender, and addressing any issues quickly, you can help speed up the process and enjoy a smooth homebuying experience.
