Top Reasons For Mortgage Closing Delays And How To Close On Time

This BLOG On Top Reasons For Mortgage Closing Delays And How To Close On Time Was UPDATED On July 16, 2017

Mortgage loan closings often do not happen on time due to many avoidable circumstances.

  • Most mortgage loan closing dates are kept on target, however, delays can occur. 
  • There are Reasons For Mortgage Closing Delays And How To Close On Time.
  • To avoid delays in mortgage loan closings, there are steps that can be taken.  
  • A mortgage loan borrower can start by completing the online mortgage application as accurately as possible. 
  • Mortgage applicants need to realize that all of the information on the mortgage application will be verified.
  • Some of the top Top Reasons For Mortgage Closing Delays is because the mortgage application and documents submitted are incomplete.
  • Discrepancies listed on the mortgage application and documents provided are Reasons For Mortgage Closing Delays.
  • For example, if a mortgage applicant states that they make $5,000 per month and have $10,000 in checking account, those information need to be verified by W-2’s, pay check stubs, and bank statements. 
  • If there are any discrepancies, the mortgage underwriter will require a letter of explanation or additional verification which will be Reasons For Mortgage Closing Delays.

Credit Inquiries

Do not apply for new credit or maximize credit cards during the mortgage process.

  • Applying for new credit will drop credit scores and set up a red flag to the underwriter. 
  • Every time consumers apply for new credit, they will have a posted inquiry on credit report. 
  • Each hard pull credit inquiry will drop credit scores by 2 or more points. 
  • Having multiple inquiries on credit report in a short period of time will alert the underwriter that consumers are desperate for credit and will scrutinize  credit file more. 
  • Every credit inquiry will need a letter of explanation and will cause a delay in the mortgage underwriting process and is one of the Top Reasons For Mortgage Closing Delays.

Purchase Of High Ticket Items And New Credit

Do not purchase new items on your credit card because debt to income ratios will go up.

  • For those who are on the borderline debt to income ratio limits, a charge on credit card can disqualify borrower.
  • Do not purchase furniture or other higher ticket items during mortgage process.
  • New purchases prior to mortgage loan closings include high ticket purchase items such as furniture, appliances, and automobiles.

Overdrafts And Late Payments

Avoid having any overdrafts during your mortgage loan application process.

  • Most mortgage lenders require no bank overdrafts in the past 12 months. 
  • Make sure to make timely payments and have no late payments either in the past 12 months. 
  • Most mortgage lenders will disqualify mortgage loan borrowers if they had any late payments in the past 12 months, especially mortgage payments.  
  • One 30 day late payment can drop your credit scores by 40 points.

Related> Delays In Mortgage Loan Closings

Related> What Causes Delays In Mortgage Closings?

Related> Things That Can Go Wrong With Home Sellers

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

Leave a Reply

Your email address will not be published. Required fields are marked *