When dealing with a brokerage firm, one might want to know whether they have the ability to approve loans in house or they have to rely on a third party to get that done. In most cases, they have to refer their client to a mortgage lending institution for the loan and typically FHA loans, as well as VA loans, take longer to get approved.
However, some brokerage firms who also double up as lenders meet government requirements and therefore have the authority to approve or disapprove loan requests. If one is pressed for time, then using such a firm may help reduce the amount of time that it takes to process a loan from a regular mortgage lender. Such mortgage brokerage firms do not have to send loans for FHA or VA approval hence the shorter funding turnaround time.
But if one is not overly pressed for time it matters little whether one goes through a firm that can approve loans in-house or one that has to send loans request to VA or FHA for approval.
In the case of the latter, it is imperative to know how long the loan processing will take. The average time for loan processing is between 21 days and 45 days.
This is crucial information as it is mandatory to have a closing date when writing a purchase contract.
Closing a transaction on time is a big deal as it can attract additional fees if the money is not in escrow by the closing date. As such, one has to work closely with the lender to ensure a smooth transaction process.