How Long Do VA Purchase Loans Take?
This is one of the most common questions we get and is one of the hardest to give an exact answer for. If you’ve read the articles for this question in regards to IRRRLs or cash-out refinances, you’ve heard most of the information, but here we’re going to provide a fresh perspective and touch on the things that are only a major consideration when dealing with a new purchase loan (as opposed to a refinance of some kind). You’re going to have to take into account complications that dealing with a seller can throw into the mix, complications you can throw into the mix yourself, and complications the lender can toss into that mixture.
For those looking for a ball-park estimate, if you assume more than 30 days and less than 90, you’re very unlikely to be wrong. The average for new purchase VA loans is around 45 days. That being said, there are an awful lot of variables that are involved here; you and the lender may get everything done as quickly as possible, but if the appraisal comes back with a reasonable value different from the sale price, the seller may take some time deciding whether to still sell at the original price. In turn, you may have to make some decisions as well. If the reasonable value comes in at lower than the sale price the VA will only guarantee the reasonable value. This means that if the seller won’t budge on the price, then you would have to make up the difference between the reasonable value and the sale price with a down payment. This obviously changes things. The VA appraisal coming back with a value other than the sale price can (but not necessarily will) introduce all sorts of complications – all of which add time to the process.
In addition, the seller can also affect the amount of time the loan takes to get approved by how available he or she is to let you in to look at the house, and to let the appraiser in to inspect the home. Often, the seller will have a real estate agent whose job it is to show the house and make it available for a potential buyer, but not always. Generally speaking, the seller does not usually cause too much of an issue with quickly getting your VA loan. Your lender usually will not either, though there are some things that can happen on the lender’s end that affect the time it takes to get the loan. One of the biggest is whether you are dealing with a lender who has automatic authority to close loans from the VA. Many lenders have approval from the VA to close on VA loans without submitting the loan application to the VA for approval first. Many lenders do not, and must submit all VA loan applications for prior approval. Needing to submit a loan for prior approval can add weeks to the time it takes to close.
As far as things that you can control go, there’s more than you might think. Sure, you can’t control the seller, the VA appraisal, or the lender, but most of the things that might delay you on their ends are things that don’t often happen. You have a more direct control over the things on your end that can affect the time. Most notably (and most frequent), is how long it takes you to get your paperwork to the lender. During the application process, the lender is likely to request varying financial documents, and the faster you can get those documents to your lender, the faster your loan will close. There probably won’t be problems with your appraisal, your lender likely has automatic authority, and the seller is probably just as anxious to sell the house as you are to buy it, so issues with those things are far from guaranteed. However, every single loan requires some sort of financial documents to be submitted to the lender, and that is under your control. The best way to ensure that your VA loan gets closed on quickly is to be as prompt with paperwork as possible.