Surprising Things That Can Derail A Closing

Posted in Real Estate by Michigan Real Estate Expert on July 6th, 2018

Surprising Things That Can Derail A ClosingOnce you and the seller have negotiated an offer and you’ve been pre-approved for a mortgage, you might think that you are in the clear as far as your closing goes. However, that is not always the case. Many surprising things can put a halt to closing. Some may ultimately stop the closing altogether while others could simply cause a delay.

Here are a few unexpected things that can derail a real estate closing:

A Job Promotion 

While you might know that changing employers is one way to interfere with the closing, another deal-breaker can be switching positions with your current employer. If you are a salaried employee and switch to a non-salary commission job, for instance, you could be looking at a problem when it comes to closing on a house.

Whenever you have any change in employment, even if it is with the same employer, most lenders will require a two-year history. A new job title could be a problem at closing — even if the new position pays more money. In some cases, the lender might not be able to include the income from your new job. If so, you could quickly end up not being qualified for the loan.

Therefore, it’s best to avoid any change in employment until after closing even if it is with the same company. Talk with your mortgage finance professional regarding your personal circumstances before making any employment changes.

Last-Minute Requests for Documents

It is easy to assume that lenders will already have all the documents that they need by closing, but that is not necessarily the case. Lenders can become overwhelmed with work, especially during a hot real estate market. Lenders will sometimes realize that they need more information last-minute.

They might ask for a canceled check, copies of your rental agreement, current pay stubs or other items. If you don’t have the documentation handy, it could cause your closing to be delayed or even completely canceled if you can’t produce the requested information.

To avoid this situation, make sure that you consistently communicate with your lender throughout the loan process. 

A Delayed Transfer 

You will most likely need cash at closing. If you are relying on your bank to transfer funds right before closing, then you might be shocked if the transfer falls through at the last minute. Bugs in the bank’s system or other issues could affect the transmission.

Therefore, make sure you time your transfer to reach you or your closing agent a couple of days before closing. 

Closing on a mortgage is something that you don’t want to derail. Avoiding the above mistakes will help ensure a hassle-free closing transaction. 

As always, remember that you can count on your trusted real estate professional to remain committed to your success throughout the entire home buying and/or selling process. 

Tags: , ,


| Comments off

The Home-Buying Closing Process in a Nutshell

Posted in Real Estate by Michigan Real Estate Expert on May 4th, 2018

The Home-Buying Closing Process in a NutshellThe closing process for a home purchase is an exciting time. The home is finished, the purchase is ready to be finalized and it’s almost time to move in. The final steps of the closing process ensures both parties are able to meet their requirements and all the paperwork is in place and verified.

The Key Players

There are actually four parties involved in a typical closing: the buyer, the seller, the bank or lender financing the purchase, and the escrow agent. Each has an important role in making sure the closing happens effectively and efficiently.

As is common with most purchases, the buyer is already familiar with the need to have a down payment ready and to be committed to a purchase. Additionally, the buyer will have already worked out the loan approval preliminary reviews and steps with the bank financing the purchase if it is not an all cash purchase.

The Escrow Process

During escrow the purchase is then validated through a number of steps. These include:

  • Ensuring the property title is clear of any problems or previous liens (a legal method by which other parties get paid for the seller’s outstanding prior debts).
  • Ensuring the property has been appraised and represents the actual worth represented to the bank.
  • Ensuring the bank is ready to pay the seller with a payment check and that the buyer has paid any down payment as well. Both payments are put into an escrow account managed by an escrow agent and not to be released until all the purchase requirements are met.
  • Ensuring the buyer has been notified, read and has committed by signature to all the purchase documentation necessary to complete the sale. This includes understanding the nature of the home loan, payment responsibilities, and what happens if there is a default.
  • Ensuring any property taxes, homeowner’s association fees, and other fees have all been addressed before the seller transfers the property to the escrow agent, which is then transfered to the seller.
  • Finally, passing along the keys and title of the property to the buyer, the title lien to the bank financing the deal, and the payments for the property to the buyer.

When all the above happens, a home purchase is closed and the home officially belongs to the buyer. The seller also gets paid and can deposit his income accordingly. The escrow agent files all the paperwork with the bank, the county recorder’s office, and copies are sent to the buyer and the seller for their own records.

Contact your trusted real estate professional if you have any additional questions about the closing process as well as other aspects of acquiring your new home. 

 

Tags: , ,


| Comments off