You’ve completed the application process with a local mortgage company, found the perfect home and negotiated an acceptable price. The only step remaining is to process and close the loan. Ideally, you want this to be a smooth process. At Starboard Financial, we want that for you, too. However, there are a few factors that can delay this important event. Below are some of the more common issues that can force mortgage closing dates to be rescheduled.
Issues with the home inspection
A home inspection provides you with in-depth information about the condition of the home. If significant problems are found during the home inspection, you may ask the seller to fix them before you purchase the house. However, depending on the seller’s willingness to fix problems and the nature of the issues discovered, this can also cause a delay.
Taking on new debts
Lenders determine whether you can afford to borrow the amount of money you have requested by evaluating your income and current debts. All of these calculations must be included on the paperwork finalized at closing. Immediately before closing, most lenders will pull your credit report one last time to make sure that everything is still the same as it was when you initially applied. If you have taken on new revolving debts since your application, however, all of the debt-to-income calculations must be performed again, leading to delays.
Issues with the home appraisal
Most lenders require a home appraisal before the loan can be finalized. During this appraisal, a third party provides his or her opinion of the home’s value. If the home’s appraised value is not at least as much as the purchase price, the lender may not allow you to move forward with closing until the purchase price has been lowered accordingly.
Just as changes in debt will alter the calculation your lender used to approve your application, changes in income will as well. For example, if you change jobs right before closing, the lender will need to perform the calculations again with your new salary or wage. Other documents, such as your verification of employment, may also need to be replaced.
At Starboard Financial, our job as an experienced local mortgage company is to help you complete your new home purchase as quickly as possible. Whether you are in Arizona, Illinois or other parts of the country that we serve, we’re here to get you through any potential bumps on your road to home ownership. Contact us here.