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The availability of funds refers to when you can access the money you have deposited in your bank to pay bills, make purchases and cover everyday expenses. With a few exceptions, the money you put into your checking or savings account isn't always available for immediate use.
Federal regulations allow banks to hold deposited funds for a set period of time, which means you won't be able to access that money until the hold is lifted. But the bank cannot hold your money indefinitely.
Funds availability describes when you can access the money you deposit in a bank account. Federal Regulation CC (Reg CC for short) provides a framework for banks to establish their funds availability policies. Specifically, the CC Regulation covers two aspects:
Banks can use these guidelines to create and enforce funds availability policies. These policies are usually disclosed when you initially open your account. Many banks also make their funds availability policies available online.
Banks can hold deposited funds for a variety of reasons, but in most cases, it's to prevent your account payments from being returned. In other words, the bank wants to make sure the deposit is good before giving you access to the money.
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In April 2022, the median time to close a mortgage was 48 days, according to ICE Mortgage Technology. But many borrowers will close faster. The exact time to close depends on the type of loan and how complicated the loan approval is, among other factors.
"Closing times vary, as national averages bring in loans that generally take longer to close than conventional loans, such as VA and HFA loans," adds Jon Meyer, loan expert at The Mortgage Reports and licensed MLO. "Most borrowers can expect to close on a mortgage in 20 to 30 days."
Whether you're a first-time buyer or a repeat purchaser of a new home, you need to consider the home search process. You need an offer accepted to get your mortgage approved, so you can't fully start the process until you've found the home you want. This could add another month or two to your calendar.
Getting pre-approved means that the lender approves all aspects of the mortgage loan, in addition to the property. Once you have an accepted offer, your lender already has a big head start on your final approval.
What do you need to apply for a mortgage?
A rare exception is self-employed borrowers who hope to qualify for a mortgage based on bank statements rather than tax returns. In this case, you will need to submit bank statements for the last 12-24 months.
The loan officer does not usually check bank statements just before closing. Lenders are only required to verify them when you initially submit your loan application and begin the collateral approval process.
Also, if there is any change in your income or employment before closing, notify the lender immediately. Your loan officer can decide if any changes in your financial situation will affect your loan approval and help you understand how to proceed.
If you cannot demonstrate through documentation that the source of a large deposit is acceptable under program guidelines, the lender must dispose of the funds and use what is left to qualify you for the loan.
Verifications of Deposit, or VODs, are forms lenders can use in place of bank statements. You sign an authorization that allows your bank to fill in the form by hand, indicating the account holder and its current balance.
loan underwriting
This includes review of your income, savings and other assets, debt and credit history, as well as verification of property information and whether you are eligible for the specific type of mortgage loan you are applying for; for example, confirmation that you meet the minimum service requirements for a VA loan.
When you're excited about closing your loan, each new step in the process can be anxiety-inducing. What if this creates an obstacle that delays my closing, or prevents it from happening at all? This can be especially true during subscription, where a subscriber will review his financial life with a fine-toothed comb.
Understanding how underwriting works and the average length of the process can help ease your anxiety and be more prepared to handle issues that may arise while underwriting your loan.
Overall, the median time to close on a mortgage — the time from when the lender receives the application to when the loan is disbursed — was 52 days in March 2021, according to Ellie Mae.
