This guide covers things that can delay your mortgage loan closing. A mortgage loan should be able to close in 30 days of less. Whether it is a new home purchase mortgage loan or a refinance mortgage loan, a complete mortgage application package consists of a lot of materials. We have discussed the mortgage application process before and will just outline it on this article.
The mortgage application process is very simple and the most difficult part is gathering the information requested by your mortgage lender.
. If you take the time and gather all the information requested by the loan officer, it makes the mortgage application processes much smoother. Full cooperation most likely will not cause a delay in closing your mortgage loan. We will be discussing things that can impact your loan closing in the following paragraphs. In this BLOG, we will discuss what things that can delay your mortgage loan closing.
First Step of The Mortgage Process Is The Loan Application
The first thing you do when you apply for a mortgage loan is to fill out the online mortgage application on the top left section of this website. If you are looking to start the pre-approval, just click on the APPLY NOW icon on the top left section of this website. Complete the secured 1003 mortgage application. The information you state on this mortgage application is extremely important. You need to be as accurate as possible because all of the information you state will need to be verified. Things that can delay your mortgage loan closing is you stating one thing on this application and not being able to verify it.
Factors and Things That Can Delay Your Mortgage Loan Closing
Several factors and things that can delay your mortgage loan closing of a home loan. These can vary depending on individual circumstances, but some common reasons include incomplete documentation: If you still need to provide all the necessary documents or if there are discrepancies in the paperwork, it can delay the processing of your loan. Appraisal issues: If the property appraisal comes in lower than expected or if there are concerns about the property’s condition, it may cause delays as the lender reevaluates the loan terms. Credit issues: Significant changes to your credit score or financial situation between pre-approval and closing can lead to delays as the lender reassesses your eligibility for the loan.
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Things That Can Delay Your Mortgage Loan Closing: Employment Verification
Lenders typically verify your employment status shortly before closing to ensure you can repay the loan. Any issues with this verification process can cause delays. Problems with the property title, such as undisclosed liens or boundary disputes, can delay the closing while these issues are resolved.
Things That Can Delay Your Mortgage Loan Closing: Homeowner’s Insurance
Lenders require proof of homeowner’s insurance before closing. If there are issues obtaining insurance or the coverage doesn’t meet the lender’s requirements, it can delay the process. Final underwriting approval: Even if you’ve been pre-approved for a mortgage, the lender’s underwriting process may uncover issues that require further clarification or documentation, leading to delays in closing.
Changes in loan terms: If there are changes to the loan terms or conditions, such as a change in the interest rate or loan amount, it may require additional paperwork and processing time, delaying the closing.
Delays from third parties: Sometimes delays are caused by factors outside your control, such as delays from the seller, title company, or other parties involved in the transaction. Natural disasters or emergencies: Unforeseen events such as natural disasters, pandemics, or other emergencies can disrupt the closing process by impacting the operations of lenders, title companies, or government offices involved in the transaction.
Change in Credit Profile Can Cause Delay in Mortgage Loan Closing
Other things that can delay your mortgage loan closing is if there are changes in your credit profile. Borrowers should not apply for credit nor purchase any large ticket items during the mortgage process. For example, if you went out and traded in your car for a new more expensive vehicle, this is one of the things that can delay your mortgage loan closing. The underwriter needs to recalculate your debt-to-income ratio and see if you still qualify for the mortgage loan. Many borrowers get disqualified for a mortgage loan when they finance a large ticket item such as a vehicle because it throws off the debt-to-income ratio.
Credit Inquiries Can Have Negative Impact
Other things that can delay your mortgage loan closing is if the mortgage loan borrowers apply for excessive credit. Credit inquiries are frowned upon mortgage lenders and will drop your credit scores. Credit inquiries are one of the things that can delay your mortgage loan closing because the mortgage lender will want a written explanation of each credit inquiry. If your credit inquiry caused a drastic drop in your credit scores, you may be disqualified and not be able to go ahead in closing your mortgage loan. Please do not apply for new credit during the mortgage application process.
Changing Jobs During Mortgage Process Can Cause Delays In Closing
Change of jobs is other things that can delay your mortgage loan closing. If you had a job change, the mortgage lender will want to see your last 30 days of paycheck stubs so a job change will cause a minimum 30 delay in your mortgage closing. For more information on this blog or other mortgage topics, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com.
