Buying a home generally takes time and perseverance, but it’s easy to run into a # of Things that could go wrong in your home buying process. That’s why Realtors and mortgage brokers provide numerous mortgage tips to help buyers avoid common pitfalls.
Most people understand that lenders require certain credit scores for various types of mortgages. The buyers generally know, within a few points, what their current credit score is, but problems often arise no one really anticipated. For example, a couple is purchasing a new home but wants to purchase the new appliances themselves and have them installed prior to closing. Purchasing top-of-the-line appliances can be costly, and a major purchase shortly before the closing can easily move the buyer’s credit score into an unacceptable category. It’s generally a good idea to postpone any purchases until after the closing.
Even though the appraised value of the property is sufficient, there may be conditions attached. If repairs or upgrades were required, and those have not been completed, the closing may be delayed until all conditions are met. This is a common problem when insured mortgages are being used. Items frequently causing issues are requirements for repairs to electrical and plumbing systems, replacement or repair of windows or doors, and even repainting. It always pays to carefully monitor the progress of all required repairs to ensure they’re completed and documented well before the closing date.
Changes in the Loan Conditions
One of the issues that frustrate buyers is last-minute changes in interest rates. That’s an all-too-common occurrence when the markets are volatile and can cause a last-minute mortgage fail when the buyer’s approval is rescinded due to the change. When the option is available, lenders generally recommend buyers lock in their mortgage rate if there is any indication a hike is imminent.
It can be tempting to “puff” information on the mortgage application, but doing so can result in having a mortgage rejected. It’s vitally important that all information on the application is as accurate as possible to avoid issues. Even if it takes a few days to get accurate information from previous employers or collect data from a tax professional, it’s better to delay submitting the application until accurate information is available. Don’t ever guess. Do whatever it takes to get complete and honest information.
Being self-employed doesn’t preclude the possibility of obtaining a mortgage, but it certainly can complicate the process. Lenders are leery of self-employed borrowers and generally require a great deal of documentation other borrows don’t need to provide. In some cases, they’ll request information just before the closing date as the loan is going through the final review process. That can easily mean a delay while the information is obtained and submitted. If you’re self-employed, it’s always a good idea to build in enough time before the closing to ensure this type of issue can be dealt with and not delay the closing.
HOA and Condo Issues
While not as common as some problems, homeowners and condo associations can create last-minute delays. If possible, deal with a lender or mortgage broker who is comfortable working with these types of organizations when you’re purchasing a townhouse or condo. It will generally make the loan approval and closing process flow more smoothly.
Since there are a #of Things that could go wrong in your home buying process, it’s important to work closely with experienced real estate professionals, mortgage brokers, and lenders. It’s also a good idea to expect issues to develop and leave enough time between signing the purchase agreement and the closing to deal with any issues that come up.