There are few things in life more frustrating than finding your dream home and being ready to move in only to find out that your loan process has hit some delays (sometimes your fault, and sometimes it’s because of someone or something outside your control). If you are considering purchasing a new home any time soon, here are some things that you should be aware of that could throw a wrench in your home buying timeline.
Since the homebuying process takes place over a period of several weeks (or even a couple of months), it’s important to make sure that your employment remains steady during that entire time. If you are planning to switch jobs or you know there will be a change to your income in the near future, talk to your lender to make sure you apply for the loan at the right time to avoid delays or problems that arise if your employment status changes.
One of the most common mistakes people make is to thing that because you got your pre-approval, you’re free to go and spend money or open new lines of credit. Making big purchases or having several credit inquiries right before your loan closes can impact your credit score and possibly even your eligibility for a loan. Save any big purchases or new credit lines for after your loan closes.
Some homeowners find that their loan is delayed after the appraisal comes back on a property and it’s lower than the amount of the loan for which you are applying. Most banks and mortgage lenders will not allow you to borrow more than the actual appraised value of the home, so if this does happen and the seller will not lower the price to the appraisal value, you can still move ahead with the home purchase but you will need to find an alternate way to pay the difference (probably cash). Similarly, if a home inspection uncovers damage that was not disclosed from things like termites, or the underwriters discover some kind of lien on the property, those things will have to be addressed before the loan moves ahead.
Additional delays can also happen when your lender doesn’t have the proper paperwork on the scheduled closing date. Unfortunately this is completely out of the homeowner’s control, but you can avoid these issues by working with a trusted mortgage lender that offers close-on-time guarantees.
Talk to Integrity First Lending about all the steps to prepare for your home loan to ensure that there is nothing in the way of moving into your dream home.