How to Avoid Typical Closing Delays With Own It Home Loans
Closing on a home is notorious for being a stressful, complicated process. On top of the general nerves and excitement surrounding a new move, no one wants the added pressure of a possible delay disrupting their timeline.
Maybe you're in a time crunch to move to a new home before the school year starts, or simply found a residence you love and want to settle in quickly. Either way, closing delays can be an obstacle for even the most experienced homebuyer.
Luckily, the experts at Own It Home Loans are here to help you through the process. The best way to avoid roadblocks on the path to successfully closing on your new home is to understand where and how they can occur.
What to expect during the closing process
You have found your dream home and are ready to get the ball rolling so you can move in quickly, but first you have to go through the closing process. Your closing date, explains Wallet Wise Guy, is when property ownership is legally passed from the seller to the buyer.
Before papers are passed, there are some critical steps that both parties need to take in order to ensure the process runs smoothly. While the specific activities may vary on a case-by-case basis, Opendoor outlines some of the typical steps you should take before your official closing date:
- Title search & insurance: Review public records to make sure the seller is the legal owner of the property. This will uncover any claims against the property so they can be resolved before moving forward.
- Home inspection: Though not required, it's best practice to conduct one before completing the purchase. A home assessment team will examine the property for liabilities so a seller can make repairs or adjust the price accordingly.
- Lender appraisal: When a buyer takes out a home loan, the lender will arrange a professional appraisal. This ensures you're taking out a loan that's in line with the value of the home.
- Final Inspection: Makes sure there are no surprises come move-in day. If repairs are needed to be made, this will be the time to check on them.
Once these steps have been followed, the real estate team, as well as the buyer and seller, will meet to transfer ownership on a predetermined closing day.
What are some typical closing delays?
Ideally, the aforementioned steps would be completed efficiently and effectively in time for your planned move-in date. Because of the different parties and pieces involved in closing a home, there is, unfortunately, many chances for things to go wrong and cause a delay.
Issues with a buyer's financing actually account for nearly half of all closing problems, Wallet Wise Guy reports. Sometimes buyers make an offer before they have even applied for a loan, or are relying on being approved and are shocked when they're denied.
This can seriously delay closing, if not stop it completely. The best way to avoid a surprise hold up due to finances is to work on your buyer portfolio beforehand. A great guide to understanding your eligibility for a loan is InterContinental Capital Group's 3 C's model:
- Credit: Helps lenders understand how you manage debt. Keep your credit score in shape by paying off your debts and don't apply for additional credit lines until your closing is finalized.
- Capacity: Your ability to make your monthly loan payments. Keep your financial records on hand.
- Collateral: The value of what you're financing in comparison to the loan amount. The mortgage appraisal will help determine this.
Realtor Magazine also reported on other common delays, and found that appraisal issues accounted for 25% of closing hold ups in June 2019 alone. A poor appraisal can create a major setback, as it means nearly everything needs to be reevaluated and/or changed to move forward. This also puts the buyer at risk of being unable to receive a loan equivalent to what they offered the seller.
If this occurs, Wallet Wise Guys recommends reopening negotiations to address the problems the appraisal found. A buyer can challenge the appraisal for the sake of their loan or ask for a new agreement with the seller. Either way, these setbacks take time, especially when they are unexpected.
Home inspections and environmental issues only accounted for 16% of delays during this time frame. Again, it's better to try to solve these problems at the beginning of the closing process to put together a realistic timeline of events. If a structural issue is overlooked and is only found near the end of the process, it can take a lot of time and work to get the activities moving again.
One simple solution: Work with Own It Home Loans
The common theme in some of the most typical closing delays is that they come as surprises to both the buyer and seller. It's easy to become wrapped up in the excitement of purchasing a new home, but this is how important details become overlooked.
Many of these problems can be avoided by working with an experienced lender that specializes in streamlining the process. At Own It Home Loans, our home loans are fast, painless and easy. With his expertise in the mortgage industry, Dustin DiMisa specifically created Own It Home Loans with eager homeowners in mind.
Our unique underwriting approach removes many of these common roadblocks before they slow you down. While most lenders take over 30 days or longer to close, our expert lenders can close our loans in as little as 14 days.
You don't have to pay more for this expedited process. Own It Home Loans offers flexible options that can actually help you qualify for more financing than traditional lenders at great rates. We accomplish this through our use of technology with the personal touch and constant communication you would expect from a local bank. Whether it's online or in person, our lenders will keep you informed about the status of your loan and any other questions you may have along the way.
Contact us today to get started on closing on your dream home quickly without the added stress of delays.