One of the most common questions veterans and active-duty service members have when applying for a VA loan is, “How long does it take to close on a VA loan?” Closing on a VA loan typically takes between 30 to 45 days, but several factors can impact the timeline. From obtaining the necessary documentation to coordinating with lenders and appraisers, understanding the VA loan process can help you plan your home purchase with more accuracy.
In this article, we’ll break down the steps involved in closing on a VA loan, discuss how long each step generally takes, and explore factors that can speed up or delay the process. We’ll also provide current housing market data and relevant statistics to help put the VA loan process in context for 2024.
In this Article
What is the VA Loan Closing Process?
The VA loan closing process consists of several stages, each of which plays a crucial role in determining how long it will take to close on the loan. Below is an outline of the primary steps involved and their typical duration:
- Pre-approval (1-3 days): Before house hunting, it’s essential to get pre-approved for a VA loan. This process involves submitting basic financial information to a lender to determine your eligibility.
- Finding a Home (Varies): The time spent finding the right home can vary significantly depending on market conditions, location, and your specific needs.
- Offer and Negotiation (3-7 days): Once you’ve found a home, the process of making an offer and negotiating with the seller usually takes about a week.
- Appraisal and Underwriting (10-14 days): The VA requires an appraisal to ensure the property meets the necessary standards. Simultaneously, the lender will conduct underwriting to verify your finances.
- Final Approval and Closing (7-10 days): After appraisal and underwriting, you’ll receive final approval, and the lender will schedule the closing. The final steps typically take about a week.
Overall, this process can take anywhere from 30 to 45 days, but there are factors that can either speed up or slow down the timeline.
Current Housing Market Data and Its Impact on VA Loan Closings
The housing market in 2024 remains competitive, with median home prices reaching $416,000 nationwide, according to the National Association of Realtors. This competitive environment can impact how quickly VA loans close, as appraisers and lenders may have higher workloads due to increased buyer demand.
Here’s a comparison of current mortgage rates for VA loans and other mortgage types:
| Loan Type | Interest Rate | APR |
|---|---|---|
| VA 30-Year Fixed | 5.99% | 6.25% |
| Conventional 30-Year Fixed | 6.45% | 6.70% |
| FHA 30-Year Fixed | 6.10% | 6.35% |
The relatively lower interest rates on VA loans are one reason why many veterans prefer them over other mortgage types. However, the increased demand for VA loans can sometimes cause longer wait times for appraisals and underwriting, particularly in hot housing markets.
Factors That Influence VA Loan Closing Time
While the average closing time for VA loans is 30 to 45 days, there are several factors that can either speed up or delay the process:
Appraisal Delays: The VA requires a property appraisal to ensure the home meets specific standards. In competitive markets, appraisals can be delayed due to high demand for appraisers.
Credit and Financial History: Lenders will review your credit score, debt-to-income ratio, and employment history during underwriting. If your financial situation is complex, the underwriting process may take longer.
Documentation: Missing or incomplete documents, such as your Certificate of Eligibility (COE) or proof of income, can delay the process.
Communication with the Seller: The time it takes to negotiate with the seller and complete any necessary repairs or contingencies can also impact the closing timeline.
According to John Williams, Senior Loan Officer at Valor Home Lending, “The two biggest factors that delay VA loan closings are incomplete paperwork and appraisal backlogs. Borrowers can help speed up the process by making sure they have all their documents in order before applying.”
How to Speed Up the VA Loan Closing Process
There are several ways you can speed up the closing process and ensure your VA loan moves through the system as quickly as possible:
Get Pre-approved: Pre-approval helps identify any potential issues with your finances early in the process, making it easier to resolve them before you begin house hunting.
Stay Organized: Keep all necessary documents, such as pay stubs, tax returns, and your COE, readily available for your lender. Quick access to these documents can prevent delays.
Work with a VA-Experienced Lender: Lenders who frequently work with VA loans are more familiar with the process and can help move things along more efficiently.
VA Loan Appraisal and Underwriting: What to Expect
The appraisal is a critical part of the VA loan process because it ensures the home’s value aligns with the loan amount and that the property meets the VA’s Minimum Property Requirements (MPRs). Here’s what you need to know:
Appraisal Timeline: Appraisals typically take 7 to 10 days, but in high-demand markets, they may take longer. The VA has specific requirements for its appraisers, which can sometimes contribute to a delay if appraisers are in short supply in your area.
Underwriting Timeline: Once the appraisal is complete, the underwriting process begins. This involves the lender reviewing your financial details and the appraisal report. Underwriting usually takes about 10 to 14 days, though it can be quicker if no major issues arise.
According to Laura Collins, Mortgage Specialist at Patriot Mortgage Group, “VA loan appraisals are thorough because they need to ensure the home meets strict safety and livability standards. This can occasionally delay the process, but it ultimately protects the buyer from purchasing a substandard home.”
Table: Typical VA Loan Closing Timeline
| Stage | Timeframe |
|---|---|
| Pre-Approval | 1-3 days |
| Finding a Home | Varies |
| Offer and Negotiation | 3-7 days |
| Appraisal and Underwriting | 10-14 days |
| Final Approval and Closing | 7-10 days |
| Total Estimated Time | 30-45 days |
VA Loan Closing Costs and What to Expect
Another aspect of closing on a VA loan is understanding the closing costs associated with the loan. While VA loans generally have lower closing costs compared to conventional loans, there are still fees involved.
Here’s a breakdown of some common closing costs for VA loans:
| Cost Type | Typical Amount |
|---|---|
| VA Funding Fee | 2.15% for first-time use |
| Appraisal Fee | $500 – $700 |
| Title Insurance | $500 – $1,000 |
| Loan Origination Fee | Up to 1% of the loan |
Veterans with service-connected disabilities may be exempt from the VA funding fee, which can save a significant amount of money during closing.
Common FAQs About Closing on a VA Loan
How long does it take to close on a VA loan?
On average, it takes 30 to 45 days to close on a VA loan, though it can vary depending on the appraisal timeline, underwriting process, and any negotiation with the seller.
Can I speed up the VA loan closing process?
Yes, you can help speed up the process by getting pre-approved, staying organized with your documents, and working with a lender who has extensive experience with VA loans.
What causes delays in VA loan closings?
Delays can occur due to issues with appraisals, incomplete documentation, and negotiation with the seller, among other factors.
How long does the VA appraisal take?
The VA appraisal typically takes 7 to 10 days, though in high-demand markets, it could take longer due to limited appraiser availability.
What documents do I need to close on a VA loan?
Key documents include your Certificate of Eligibility (COE), pay stubs, tax returns, and financial statements.
Are closing costs for VA loans lower than conventional loans?
Yes, VA loans often have lower closing costs, but you should still expect to pay for the VA funding fee, appraisal, title insurance, and other standard closing costs.
Do VA loans close faster than conventional loans?
Not necessarily. VA loans typically take about the same amount of time to close as conventional loans—around 30 to 45 days.
Can the seller pay closing costs on a VA loan?
Yes, sellers can contribute up to 4% of the loan amount toward the buyer’s closing costs, which can help reduce out-of-pocket expenses.
Conclusion
Closing on a VA loan typically takes 30 to 45 days, but several factors can influence the timeline, such as appraisal delays, incomplete documentation, and underwriting complexities. Veterans can take proactive steps to ensure a smoother and faster process by staying organized, working with experienced VA lenders, and getting pre-approved early in the homebuying journey.
By understanding the steps involved in the VA loan process and anticipating any potential roadblocks, veterans and service members can confidently navigate their way to closing on their dream home.
