Getting a mortgage can be stressful, especially when last-minute issues crop up that can stop the process in its tracks. These surprises are unpleasant, but they don’t have to spell disaster for your mortgage if you act quickly.
Problem: Additional Documentation is Needed
Your lender calls you days before closing and requests additional documentation. This most often occurs when the lender needs to verify closing funds or requires proof that all conditions for approval are satisfied, such as settling a debt.
Solution: To rectify it quickly, take the required paperwork to the lender in person, if possible. If not, see if you can send it by email or other digital means. The final option is to send a fax directed to the attention of the loan officer who is working on your mortgage.
How To Avoid It: Contact your lender no less than one week before closing and make sure there’s no additional paperwork you need to turn in.
Problem: Paperwork Error
An error in your paperwork has brought the loan process to a halt. This issue can range from the misspelling of a name to erroneous financial figures.
Solution:Include all necessary supporting documentation when you submit the corrections to increase your chances of a timely closing.
How To Avoid It: Review all of your application and loan paperwork well ahead of closing and keep an eye out for errors, no matter how trivial. Be especially diligent about the loan amount, down payment, interest rate and closing costs.
Problem: Unavailable Payments
Lenders require you to pay the funds for your down payment and closing costs on closing day from certified funds, and this is often done by a direct bank transfer. However, bank errors and other delays can cause this option to fail, leaving you unable to close.
Solution: You can’t use personal checks for this purpose, so your only option to fix this situation fast is to request a certified or cashier’s check from your bank and bring it with you to closing.
How To Avoid It: Arrange for the transfer to happen a few days in advance of the closing date to leave room for possible hiccups.
Problem: Unexpected Problems During Final Walk-Through
Lenders require assessment of the property before signing off on a mortgage. This is often done near the end of the process, which can be trouble if the condition of the property has deteriorated since the first appraisal inspection.
Solution: After discussing the extent and costs of the repairs with the inspector, talk to your real estate agent about having the sellers pay for any necessary repairs. This is usually negotiated by requesting the seller’s escrow funds or by increasing their closing costs to cover the expenses.
How To Avoid It: Request the inspection a few weeks before closing to ensure that any problems are found and dealt with before you’re at the table.