If you’ve ever bought a home, you probably know there are many issues that can delay a closing. And if you haven’t bought a home, we’re here to tell you the most common issues that can delay a closing – so you can try to avoid them.
But before we delve into the issues that can delay your closing, we’d like to provide a little tidbit of advice. The number one thing that can make the mortgage process seamless and stress-free is communicating with your lender. If you’re ever unsure about a step in the process, it’s best to reach out to your lender and discuss it. Doing so will minimize both delays and confusion.
Now, onto the issues to avoid if you don’t want to delay your closing.
Common Issues That Can Delay a Closing
Errors in documents
The mortgage process requires many documents to be filled out and they must be pristine when turned into the appropriate party. Small errors such as a misspelled last name or use of a nickname instead of legal name can delay the process.
Money issues can refer to any number of issues: problems obtaining the mortgage, bank problems on the day of closing, unexpected closing costs, etc. One thing many buyers don’t realize is that a mortgage isn’t locked down until the papers are signed. Even having a pre-approval from the lender doesn’t guarantee you will receive your money.
No, lenders are not trying to leave you high and dry, there are just many things that can change your financial eligibility. For example, sometimes a person’s credit score may lower from the time they are pre-approved to the time the loan is being underwritten. This shift may cause the lender to have to change the terms of the loan, or deny it altogether. A good loan officer will instruct you to refrain from making major credit purchases during the application process.
Missing loan documents
As mentioned above, there are many documents in the mortgage process. It isn’t uncommon for the papers to be misplaced or never turned in. These missing documents will delay the process until the buyer can provide another copy.
Similarly, there are regulations in place that require the buyer to have certain documentation in hand three days prior to the closing. If the buyer does not receive the documents at least three days before, the closing must be delayed.
It is extremely important to do a title search prior to closing. Many sellers are unaware of previous liens on their property, making it impossible for them to disclose that information to potential buyers. If there is an active lien, it could mean delaying the closing for weeks or even months while the issue is sorted out.
Last-minute requests often come from either the lender or the buyer. In the lender’s case, they may need additional paperwork to finish processing the mortgage. If the lender plans ahead accordingly, like we do here at Mortgage Specialists, there should never be a need for last-minute requests. The buyer may have final requests for the seller to complete before the purchase of the home is final.
Issues during final walkthrough
The final walkthrough is one of the last steps in the mortgage process. It is the last time buyers see the home they are about to purchase, meaning they are on the lookout for anything unfavorable. Sometimes, small damage is found or the utilities are not functioning correctly, meaning the closing is delayed until the buyer and seller can come to an agreement of how the issue will be handled.
As you can see, there are many issues that can delay a closing. Just being aware of the issues and working with a qualified mortgage professional can help to avoid delays in the closing process.