mortgage delays

The Most Common Reasons Mortgages Are Delayed

Jul 20, 2018 (0) comment , ,

Some people get their homes easily, while some may find it more difficult and sometimes some people even face rejection. This is because a home loan is a very complicated financial transaction that has a lot information and documentation. It also requires a lot of work from different people and companies to go from filling out an application to closing. Of course, who doesn’t want closing within a decent timeframe? People involved in this process have different ideas and timeframes. As a buyer, you will be very eager to close on your new home. The seller will look to quickly finalize the deal and get the funds for their home in order to buy their next property. The real estate agents will look for a seamless transaction and want to close on time to start working on their next deals.

Delays frustrate everyone. They take up a lot of time and can be expensive and can even cause the closing date to be further delayed.

So let’s have a look at some common causes for mortgage delays and some tips to avoid them and keep the home buying process running on schedule.

Before, mortgages used to take months to close. Currently, closing times have been significantly reduced. Many agents have reduced their mortgage process closing time. But there are still a lot of legitimate reasons for closing delays. First, you should talk to your mortgage banker if you’re feeling nervous. You should also proactively reach out to them to keep track of the progress of your loan every step of the way.

Appraisal value

One common cause for a closing delay is the appraisal value of your home. If the appraisal value is low, the file is assigned to another agent and they have to review the file until it’s addressed. Mortgage bankers will not work on suspended loans, so they will wait until the appraisal issues are addressed.

Title Work Challenges

Title work can also take up time in the loan process. Life events such as marriages and divorces can hinder the title work, as can any liens against the property. Appraisals and titles need time to be addressed precisely, and that can cause a delay when closing.

Not providing details of your financial profile

An experienced mortgage lender will start by reviewing your details such as personal and contact information, employment and residence history, income, assets and debts. Be sure to honestly answer all these questions and all the details about your financial profile; whether it’s in person or on a form. If not, it can delay the whole loan process.

Not providing all required documents

The second thing your lender will ask you for are all required documents for your entire profile, including 30 days of pay stubs, tax returns and W-2s, business financial statements, asset account statements, explanations and paper trails of all deposits, home insurance quotes, etc. If you fail to provide any required documents, it will prolong the process and cause a delay on your closing.

Misinterpreting approval status

This can negate a deal and/or take years to fix. Make sure your loan officer is an approved lender before you write any offer to purchase a home. Be sure an underwriter approves your loan and get a formal loan commitment letter in writing.

Not giving home offer details to the lender

The purchase contract includes vital time-sensitive milestones such as how many days you need to secure a loan approval and how many days you need to close. Make sure your lender provides these important dates that your agent writes into the contract. If you ignore these dates in your contract, you may lose your initial deposit on the home.

Not being informed about rates

Once a seller accepts your offer, you will be in a contract to purchase your home and you’ll be ready to fix a rate for your mortgage. Rates are priced based on how long they’re fixed. Ask your lender to lock your rate as per your closing timeline. Ensure your loan approval stays valid if rates rise while you’re looking to buy a home.

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