Reasons For Mortgage Closing Delays And How To Close On Time
This BLOG On Reasons For Mortgage Closing Delays And How To Close On Time Was UPDATED And PUBLISHED On September 22nd, 2018
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
- Borrowers 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 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
In this article, we will cover and discuss the top reasons for closing delays.
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:
- Underwriters will scrutinize credit file more
- Every credit inquiry will need a letter of explanation
Credit disputes need to be retracted and can cause delays in the mortgage underwriting process and is one of the reasons For 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 lenders require no bank overdrafts in the past 12 months
- Make sure to make timely payments
- Have no late payments either in the past 12 months
- Most lenders will disqualify 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.