Purchasing a new home is an exciting milestone in many people’s lives. However, the mortgage process also comes with its fair share of stress and anxiety. One of the most pressing questions for homebuyers is, “When will I actually receive my mortgage funds to close on the property?”
This article provides an in-depth look at what borrowers can expect for the mortgage funding timeline when financing with HSBC Bank. We will examine the key steps in the lending process, factors that impact funding speed, and tips to get your mortgage money as quickly as possible.
Overview of Mortgage Funding Process
Before a lender like HSBC is able to release loan funds, the bank must first thoroughly verify and approve the mortgage application. Here is a high-level overview of the standard sequence:
- Application and Underwriting: The borrower completes a mortgage application and submits all required documentation. HSBC processes the application, reviews credit and assets, verifies income and eligibility, and assesses risks to make an underwriting decision.
- Mortgage Approval: With underwriting complete, HSBC issues a loan approval letter with final terms, interest rate, lender fees, and closing conditions.
- Signing Closing Docs: Approximately 10–14 days before the scheduled closing date, the borrower receives and signs the final mortgage documents and disclosures.
- Final Underwriting Approval: HSBC does any last verification of income, assets, title, and appraisal before releasing funds.
- Disbursement of Funds: On the confirmed closing date, HSBC wires the approved loan amount to the title company or attorney handling the real estate transaction.
Now let’s look at expected timeframes for each stage of the process when financing with HSBC.
HSBC Mortgage Funding Timeline
Here is a detailed look at typical processing times for getting mortgage funds from HSBC Bank:
Application and Underwriting Period
- Application Submitted: Day 1. The borrower submits a completed application with initial income and asset documentation.
- Processing and Verification: Days 2–7 HSBC reviews the application for completeness, orders credit reports, processes documents, and verifies applicant information.
- Underwriting Review: Days 8–21 The loan application goes through intensive underwriting analysis, an assessment of risks, and confirmation of eligibility requirements. Additional documents may be requested.
- Requests for Documentation: can take 1-2 weeks. If underwriting needs clarification or missing documents, borrowers should provide the requested items within 48 hours to avoid delays.
The underwriting process is typically the longest phase, often taking 3-6 weeks with a complete application and timely responses from the borrower.
Mortgage Approval Timeframe
- Mortgage Approval: Weeks 4-6. Once underwriting is finished, it takes approximately 5-7 days for HSBC to issue the final loan approval letter with closing instructions.
Signing Closing Documents
- Closing Docs Sent 10–14 days before the scheduled closing date. HSBC sends the finalized closing documents for the borrower to review and sign.
- Signed documents Returned within 1-2 days To prevent delays, borrowers should promptly sign documents and return them to HSBC within a couple days.
Final Underwriting Prior to Funding
- Final Review: Leading up to the Closing Date HSBC conducts a last check to ensure that all underwriting conditions have been fulfilled and the property appraisal is acceptable.
- Clear to Close: 1-2 days before closing. The lender gives final approval to release mortgage funds.
Disbursement of Mortgage Funds
- Wire Transfer of Funds: Closing Date On the agreed closing date, HSBC wires the approved loan amount to the designated title company or closing attorney. Funds are received by early afternoon.
Factors That Can Delay Mortgage Funding
While HSBC strives to fund loans as efficiently as possible, here are some common issues that can slow down the process:
- Borrower Delays – Late document submissions or unresponsiveness to underwriter inquiries can delay approval. Provide requested items within 48 hours.
- Appraisal Timing – Depending on property type and appraiser availability, appraisals may take 1-3 weeks. Any re-inspection needs can also prolong timelines.
- Title Issues – Complex title histories can add extra time for title search, resolving exceptions, and clearing liens prior to closing.
- Mortgage Product – Government-backed FHA and VA loans require extra processing and generally fund slower than conventional mortgages. Jumbo loans also take longer.
- Property Problems – If repairs are required due to inspection issues, it can hold up final approval until completed satisfactorily.
- Changing Circumstances: Modifications to employment, income, debts, properties, or assets during underwriting often require re-verification and delays.
In essence, while a smooth process takes about a month, insufficient paperwork, appraisal problems, or title complications can easily extend the funding timeline by several weeks or longer.
Helpful Tips to Expedite Funding
Here are some key steps buyers can take to help accelerate the mortgage funding process with HSBC:
- Get Pre-Approved: Being pre-approved gives HSBC a head start on verifying application details and assessing affordability early.
- Organize Documents: Keep all paperwork organized and properly labeled. Send new documents as soon as possible.
- Update on Closing Timelines: Inform real estate agents of your desired closing date and funding needs as soon as possible.
- Shop Early for Title: Order a title search a month in advance to uncover any exceptions well before the closing date.
- Avoid Changes Mid-Process: Make no changes to employment, income, assets, debts, properties, or marital status until after funding.
- Choose a Conventional Loan: Conventional mortgages generally require less processing and are funded quicker than government programs.
- Select a Shorter Lock Period: Option for a shorter rate lock if you are confident of securing funding within 30 days or less.
Options If Funding is Delayed
- Request a Rate Lock Extension: HSBC may allow free extensions of the rate lock period to cover processing delays.
- Bridge Loan: A short-term loan from a different lender can provide funds while you wait on HSBC.
- Equity Line of Credit: Home equity lines only require short processing times and can serve as temporary financing.
- Closing Date Extension: If issues arise late, negotiate with the seller for a brief extension to the closing date.
- Change Funding Date: HSBC may allow funding date changes for a small fee, especially if delays are their fault.
Having backup plans helps protect the home purchase if HSBC is unable to deliver mortgage funds in time for the scheduled closing date.
Conclusion:
HSBC strives to provide mortgage funds within 30-45 days from completed application to closing. However, many external factors can jeopardize or delay funding. The most prudent course is to be organized and proactive, choose loan products and programs carefully, communicate expected timelines, and have contingencies in place. We hope this detailed overview provides clarity on the key steps, timeframes, and options throughout the HSBC mortgage funding process. Please reach out with any other questions.
FAQs:
How long does HSBC’s underwriting process take with a complete application?
The underwriting period with HSBC usually takes 3-6 weeks with prompt submission of all required documents from the borrower.
What if my appraisal takes longer than expected?
Request an appraisal extension from HSBC while following up with the appraiser. Be prepared to potentially delay closing until the appraisal report is received.
Can I get a rate lock extension from HSBC if funding takes too long?
Yes, HSBC generally provides borrowers with free rate lock extensions if delays in funding are due to circumstances on the lender’s end.
When on the closing day do the funds need to be at the title company?
HSBC wires mortgage funds to be delivered by early afternoon on the agreed closing date.
What options do I have if it looks like funding won’t be on time?
Discuss backup financing options with HSBC or consider alternatives like a bridge loan or HELOC. Extending the closing date also buys more time.