“We might have to delay the closing.”

There are few statements that strike fear into the hearts of homebuyers as much as this one. Closing dates have a certain sacred air about them, with the prospect of missing one absolutely unthinkable.

A delayed closing leads to some uncomfortable conversations at best, at worst it can cost you your new home. Avoid ending up in this situation the next time you’re shopping for a house by reviewing the most common reasons behind closing delays.

1. Unrealistic Timeframe.

It’s always good to think positive, but chances are your transaction isn’t going to be finished in two weeks. Buyers sometimes set unrealistic closing dates, often in deals where a realtor isn’t involved. With only a very narrow window to close it’s easy for small details to cause a full-scale derailment.

The Solution: On average it takes about 45 days  to close a loan. Plan accordingly and build in room for due diligence even if a realtor isn’t involved in your transaction.

2. Appraisal Issues.

The word “comps” gets thrown around quite a bit during the home buying process. If you’re not familiar with the term, it means recent sales that are similar enough to the house that you’re buying for the lender to get an estimate of value.

Problems come up when the purchase price of the subject property doesn’t line up with recent sales in the neighborhood. When that happens, the lender may subject your appraisal to additional scrutiny, such as a second appraisal or requiring more comps.

The Solution: Order the appraisal as early as possible in the loan process.

3. Employment and Asset Verification.

A big part of your loan application involves the underwriter verifying your job status and checking your assets. Significant delays come up when employers can’t be contacted, large deposits can’t be identified, bank statements are missing, or paperwork is not submitted on time.

The Solution: Provide accurate information on your loan application and when submitting documents to the underwriter.

4. Title Issues.

Before a property can be bought or sold a title search must be conducted. This identifies any potential challenges to ownership such as liens, encroachments, or claims against the property. In some cases, the search (and resolving any issues) can take longer than expected.

The Solution: Begin the title search early, so the title company has ample time to catch and correct potential problems.

5. Processing Workflow.

Not all lenders are created equal. Some lenders can underwrite a loan within hours; others may take days. If your lender doesn’t have a well-structured workflow you might end up waiting on them to finish your loan.

The Solution: When comparing different lenders research how long it takes for each of them to close a loan.

Minimize your chance of missing a deadline by choosing a lender that makes a fast and efficient closing a priority. At Cendera we handle all of our processing and underwriting in-house, a feature which allows us to close many loans in just 22 days. Click HERE to speak to one of our qualified Mortgage Bankers about your next home purchase.