Preventing Home Closing Delays & How To Close On Time
This ARTICLE Is About Preventing Home Closing Delays
The home buying and mortgage process does not need to be stressful. Preventing Home Closing Delays
Buying a home is a very exciting time for an individual and also a very stressful time.
- There are a lot of moving parts for a buyer and a lot of people involved that each has their own roles
- A buyer will usually start with their realtor, who is dealing with the seller’s realtor, the loan originator who deals with the mortgage processor and mortgage underwriter, the title company, and an appraiser
- Whew, there are many people who have their respective part of this process!
- In addition to that, the buyer and seller are most worried about making sure that there are no surprises come up with an inspection or appraisal
Both buyers and sellers side want to make sure buyers meet the closing deadline listed in the purchase agreement.
Delays In Home Closings
Many lenders will tell borrower they will meet this deadline and not to worry:
- However, some fail to deliver on this promise
- This is because their files may be delayed due to lack of staffing or an extremely high volume
- Other delays can arise if the appraisers in the area are extremely busy and orders cannot be completed within a week or two
- Each one of those things, when they occur, can cause additional stress for all parties involved
- Some of these can be avoided
- It is important to note, the lender cannot control the timing of the appraiser
- But the mortgage company should have control over internal delays
- Many lenders can get a deal done and closed within a 30-45-day period if all goes well and there are no delays or issues with the appraisal
What can your loan officer do to help avoid in preventing home closing delays?
Documents Required To Process Mortgage Loan
When you decide who your lender will be and make contact with a loan officer, you should be prepared to provide certain documentation.
- After your loan officer takes your application, there are certain items that should be requested and submitted when your file goes to an underwriter
- These items may change based on what is on a particular credit report, each scenario is unique
- However, there are some items that are just a given on all files
- Make sure to get the loan officer or mortgage processor all the documents required
- Make sure that the documents provided are complete with no missing pages
Getting the loan officer or processor to complete neat files is key in preventing home closing delays.
Preventing Home Closing Delays By Provided Completed Documents Required
Required Mortgage Documents you should be prepared to provide:
- 30 days of most recent pay stubs
- 60 days of bank statements for all bank accounts showing funds for the down payment and closing costs
- 2 most recent years of tax returns with all supporting schedules
- Copy of your Driver’s License and Social Security Card
- With previously filed bankruptcy, need all of the paperwork ready to submit, including discharge papers
- If there are recent collection accounts, need a letter of explanation for each account prepared
- Renters should have a record of rent payments via 12 months of canceled checks and/or bank statements
- Buyers with the purchase agreement, a copy of the fully executed purchase agreement along with the Lead-Based Paint Disclosure
- The loan officer is working to submit a file as complete as possible to minimize the number of conditions that need to be cleared once the file comes back from the underwriter
Having all the documentation ready at the beginning of this process will save a lot of time and help to avoid any delays.
Preventing Home Closing Delays And What To Do With Delays And Missing Closing Deadline?
As explained earlier, there are certain situations where delays may not be avoidable, such as the appraiser backlog scenario.
- Typically, a realtor in that area will know if there are significant delays with appraisers at the present time
- They will plan for that when putting in a closing date on the purchase agreement
- If there is a delay, it is important to remain calm
- The loan officer understands the stress the buyer experiences when a delay occurs
- Will work hard to move along anything within their power to get this taken care of
- If the delay is caused by internal situations at the mortgage company, know that your loan officer is likely doing anything within their power to resolve the situation
They may have already contacted senior management in all departments prior to even notifying borrowers of the delay.
Preventing Home Closing Delays And What Happens If Closing Deadline Is Not Met
If the closing deadline is going to be missed, buyers will need to have an addendum done to the purchase agreement:
- Needs to state an extended closing deadline that is signed by buyers and the sellers
- Most sellers and realtors understand that this can happen from time to time
- They know exactly what to do
Trust that all of the parties involved are well educated in their respective roles of the transaction and all doing their part to ensure a timely closing.
Meeting Closing Date And Preventing Home Closing Delays
It is always an exciting and stressful time when buying a new home.
- To ensure everything moves through the process smoothly in a timely, it helps the buyer to be prepared
- If borrowers promptly respond to questions or requests for documentation by the loan officer, this helps clear any conditions placed by the underwriter quickly
- Cooperation is key so the file can be submitted for a clear to close
The more prepared and the more information borrowers can provide in the beginning, the more likely they are to have a better turnaround time from application to closing.
About Gustan Cho Associates
Mike Richardson is President of Capital Lending Network, Inc. dba Gustan Cho Associates. Mike is also an associate contributing editor at Gustan Cho Associates and manages a team of licensed mortgage loan originators. Mike is the author of this blog, Preventing Home Closing Delays.
- Mike Richardson is the author of this article and President at Capital Lending Network, Inc.
- Gustan Cho is the National Managing Director of Gustan Cho Associates and an expert in originating FHA, VA, USDA, Conventional Loans, as well as non-QM mortgage loan products
- Both Mike Richardson and Gustan Cho knows their lending guidelines
- GCA Mortgage Group is a national mortgage company with a national five-star reputation of having no lender overlays
- A large percentage of our borrowers are clients who could not qualify at other lenders due to their lender overlays or due to last-minute mortgage loan denials
- The number one reason for last-minute loan denials is due to the loan officer not properly qualifying the borrower either due to issuing a hasty pre-approval letter
- Or the loan officer not being familiar with income analysis and/or lending guidelines or their own lender overlays
Mike Richardson and Gustan Cho have a combined 50 years of experience as real estate investors and lending.
Gustan Cho is one of the nation’s top mortgage loan originators. Gustan Cho Associates is headquartered in Lombard, Illinois. Gustan Cho is Editor in Chief for Gustan Cho Associates and is a team leader at Gustan Cho Associates. The Team at Gustan Cho Associates is available 7 days a week to take calls to answer any questions borrowers may have on any loan program, its guidelines, and any case scenarios they may have. Borrowers can contact us at Gustan Cho Associates at 262-716-8151 or text for a faster response. Or email us at [email protected]