The Top 11 Reasons why
your clients Mortgage Loan will not close in 30 days.
What are all these new
TRID rules? What does TRID stand for? This is a great reason for a Google Live
Show. Stay tuned for some great information this week with two seasoned
professionals with over 50 years combined experience.
1. Initial contract is written with a 30 day
close and it takes 10 days to negotiate.
A mortgage loan and contract
have two different start dates. A 30 day period for a mortgage starts the
day of final acceptance on the contract.
2. Delays in inspection
negotiations and/or appraisal.
Appraisal turn times are
typically one week. Appraisals cannot be ordered without a check from the
borrower ( $425.00 is our Cost ) and an intent to proceed which does not happen
until inspections have been negotiated. If inspections take longer to
negotiate your transaction will most likely be delayed.
3. Borrower Delay in getting documentation
including conditions to
processing for final approval.
processing for final approval.
When a Pre-Qualification/
Pre-Approval Application is taken then the borrower knows what initial
documents are needed in order to process and underwrite the loan. If
he/she/they fail to return these items in a timely matter the entire process is
held up.
4. Poor
Communication between Realtor, Lender, Title Company and Borrower.
Every delay in returning a call and/or
email can cause a delay if the question needs an immediate response. Amendments
to the contract need to be communicated so the lender can address immediately.
New home contracts have several amendments including overages paid by the
borrower can affect price and borrower out of pocket expenses to be verified.
5. Buyer has
an incomplete application.
- A Pre-Qualified
or Pre-Approved Buyer is a prepared buyer when complete application is
given at the time of contract receipt.
- Most Recent 30
days paystubs.
- Last 2 years
W-2’s
- Last 2 year 1040
Tax Returns with All Schedules
- If Self Employed
2 years of Business returns if applicable.
- Last 2 months
bank statements
- Most Recent
Account statement covering 60 days from the account that will be providing
the down payment.
- Fully Executed
Real Estate Contract
6. Borrower failed to
disclose important facts or information up front.
Many times borrower’s do
not think it is important to disclose divorce, bankruptcy, foreclosure, job
changes, new credit and more. These all can effect the process of the
loan.
7. Inefficient Lender Processes.
We have increased staff to
put into our process a 21 day minimum SLA. I will go through this later.
If a lender has a slower turn time on Set-up, Processing, Underwriting,
and closing then expect a delay.
8. Seller Title Issues.
Often title is clouded with
old liens not released such as equity loans or previous mortgages. Also
someone could have been deceased or divorced. Judgements also show up
attached to property and have to be released prior to a deed transfer.
9. Borrower changes something from initial
application.
Borrower could have changed
jobs, accepted a special credit promotion, purchase a car, bought new
appliances on credit or all kinds of things that change the credit file
originally approved.
10. Agreed upon repairs have not been completed
prior to final inspection.
Repairs negotiated need to
be completed and verified as complete by the appraiser prior to closing.
If this does not happen and advance warning is not communicated, then the
transaction will most likely be delayed.
11. The home cannot be insured or has a very high
cost of insurance.
Many
times if a home has had a prior claim or has an old roof or some other high
risk of claim then the insurance could be denied or rated very high. Also
flood maps change and the property could be in a flood zone that effects the
cost to the buyer.
