Tips To Avoid Delays At Closing

Written by Posted On Monday, 07 March 2016 07:14
Tips To Avoid Delays At Closing Tips To Avoid Delays At Closing The Pascarella Real Estate Group

A delayed closing on a home purchase can have many ramifications for a buyer, both emotional and financial. New federal rules make it harder for homes to close on time by requiring lenders to comply with the strict "Know Before You Owe" regulations instituted in October 2015. Lenders were informed two years ago that this change would be taking place, giving them time to figure how to combine the previous Truth in Lending requirements and the Real Estate Settlement and Procedures Act with the TRID forms. Prior to the implementation of TRID, the average transaction took 30 days to close, after TRID the average closing was extended 40.5 days. In December 2015, that number had jumped to 50 days. The main cause for the delay is the Closing Disclosure (CD), a statement of the final costs and loan terms that must be given to the borrower at least 3 days before the closing. Once the CD has been issued the lenders may not make any changes, any differences after issuance must be paid by the lender. This easily explains why lenders wait until the last possible moment to release the CD. With this information in mind, how do you avoid a TRID related delay?

 

                               Here are a few tips from The Pascarella Real Estate Group

 

  • Make sure to ask your lender for a longer rate lock, typically 30-60 days. That way if there's an unforeseen delay, you won't lose your promised rate. TRID mandates that your interest rate be locked in prior to the CD being issued, it's worth it to pay a little extra if necessary to secure a great rate.                                                                                                                                          
  • It's good practice when buying a home to schedule inspections as soon as possible to prevent delays so if there is an issue there is plenty of time to get it resolved. Also, if a Home Owners Association requires approval of all new residents, that application should be filled as soon as possible.                                                                                                                                            
  • If at all possible, you should try to schedule either the closing on your current home or the lease on an apartment to give yourself a little extra time just in case an issue arises. That way if there is a delay you won't be out on the street.
  • Tell the truth and nothing but the truth. It might seem obvious but one of the main reasons for delayed closings is a lack of full disclosure from the borrower concerning finances. Think of getting a mortgage as similar to an audit, you need to tell your mortgage professional everything to avoid problems down the road. The list of documents needed from a borrower just keeps getting longer, start early to collect all of the necessary documents.                              
  • No major transactions! Once your mortgage professional has gained an approval for your mortgage you need to be very careful with your spending. No new credit cards, new car loans or changing to a new job. All loans are given a "conditional approval" and any change to your financial profile can cause your loan to be postponed or denied. Sadly this is the number one cause for closing delays, often causing Realtors, lenders and buyers to have to scramble to keep a deal on track.
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