As prepared as you may be as a homebuyer, you might encounter a few factors outside of your (or your lender’s) control that could ultimately delay your closing. One of the best ways to avoid a delay, or at least prepare for it, is to understand what could cause a delay in the first place.
Here are a five uncommon things that could potentially cause a closing delay.
A home inspection is a great way to root out any structural or cosmetic problems in a house before you finalize your purchase. Your real estate agent may be able to negotiate with the seller to make any necessary repairs, settle on a lower sales price, or make some other concession.
If the safety and soundness of the property are in question, you won’t be able to close on your loan until those repairs are complete. The seller may also neglect or forget to have something fixed by the closing date. Your mortgage banker will keep you informed of any potential issues that could delay your closing date. And something like the seller forgetting about making fixes on time may be prevented by double checking with your agent that they’ve communicated with the seller’s agent.
Home loans are big processes and can involve many different teams working to close your loan. A third party, or anyone not directly affiliated with either the buyer or the seller, can sometimes hold up the process. Home inspectors, surveyors, appraisers, and employers providing income verification are considered third parties.
With so many people working together, you can sometimes be left waiting on a third party to do their part so everyone can continue.
Scheduling mishaps can happen. During the busy spring and summer home buying seasons, it’s possible for inspectors to get swamped and just not have a free date until later in the month. Scheduling issues can also be the result of oversight, maybe an employer never sent their verification. These kinds of problems can be frustrating, but are usually preventable with good organization. Staying in communication with your mortgage banker will hopefully help you avoid this mishap.
To buy your house, the title must be transferred from the seller’s name to yours. But delays can crop up if there is some kind of rare problem with the title itself. It’s even possible to have errors in your home’s public records — for example, if an unknown lien was placed on the property, or if conflicting surveys exist.
Because problems with a title could be the result of past mistakes, there’s not much you can do to avoid them. Even minor issues can take some time to resolve. In a situation like this, a little flexibility and patience can go a long way.
You can definitely expect to experience delays if there is a problem with your funding.
To close on time, you’ll have to have the correct amount of money available to cover your down payment and any closing costs through either a wire transfer or certified check.
If you forgot to get a check or order a wire and the issue can’t be resolved after banks have closed for that day, you’ll have no choice but to bump closing to the next business day to allow for processing. If you’re instructed to wire funds, it’s important to talk to your settlement agent or attorney about what their wiring requirements are.
Issues can also happen when your expected funds don’t arrive on time. Some buyers rely on gifted funds from friends or family members to help them reach their down payment goals. If those funds are missing, or the documentation is missing for whatever reason, closing can be delayed to allow for processing and transfers.
This is one potential delay where you can do your best to avoid by communicating with your lender and settlement agent to know exactly what’s expected from you in terms of closing costs and certified funds.
Even if everything goes according to plan, delays can still happen. Natural disasters can bring everything to a screeching halt, including your mortgage. When a hurricane, blizzard, or other disaster strikes, your new home might sustain damage that needs repairs that could delay your closing date. Extreme weather can also shut down city offices and banks, leaving you to wait while the city gets back on its feet.
Even if your house was untouched by a natural disaster, the location of the home may throw up a red flag and slow things down. For example, some insurance companies will not issue policies if an area was hit by a storm. Also, lenders may require re-inspections of the home (post-storm) by the appraiser to make sure the property is still intact.
If your closing falls near a holiday little bumps can turn into big delays because home repairs, inspections, and anything that has to go through a bank will be that much more difficult to reschedule.
While closing delays are uncommon, they can still happen because of unique circumstances. Staying in touch with your mortgage banker and real estate agent can help you prepare for and even avoid any potential delays or hiccups. Another great way to ensure a smooth closing is know what to expect at closing and how you can prepare.
If you have any questions about closing, or any other part of the loan process, check out the resources on the Atlantic Bay blog, or contact your mortgage banker.