How Houston Home Buyers can Avoid Most Closing Delays
Houston home buyers may not realize it, but up to one-third of home closings experience some type of delay. A recent survey by the National Association of REALTORS® shows four main causes of closing delays:
- Problems with home buyer financing – 46%
- Problems with the home appraisal – 21%
- Repair or condition issues found during the home inspection – 14%
- Delays caused by new closing regulations that become effective October 3, 2015 – 20%
While some situations are beyond the home buyer’s control, it’s sobering that almost half of all closing days are related to financing issues. Breaking this down further, here are common reasons why mortgage financing falls through:
- Adverse changes in the home buyer’s credit score
- Discovery of additional financial obligations, such as child support payments, that were not previously disclosed. This can affect debt-to-income ratios, which determine affordable mortgage payments.
Simply put, some home buyers misunderstand the mortgage pre-approval process. A reasonable person might assume that a pre-approval means there’s nothing to worry about. However, the pre-approval is not an iron-clad guarantee of final mortgage approval. Think of the pre-approval as the first green light; but you’ll need to pass through that intersection again before closing!
After you make a successful offer on your new home, and the clock is ticking towards closing, your mortgage lender will look at your financial package again. They will re-verify your employment data, income, bank accounts, debts, credit report, and so on. If anything in your financial picture has changed, it can cause your mortgage lender to step back and start over.
To prevent delays in closing, and to preserve your mortgage financing approval, it’s best to keep things consistent between your pre-approval and your home closing. Even a financial change that seems benign – such as taking a new job for more money – can cause your lender a belly ache.
Avoid doing the following before your closing:
- Changing jobs
- Opening or closing new lines of credit
- Buying a car
- Co-signing for someone else
- Withdrawing large amounts of cash from your accounts to make purchases
- Changing your spending and savings habits
It also pays to be completely honest about all of your financial obligations. It’s better to disclose all payments up front, than for your lender to figure it out later when they screen your bank statements.
When you are ready to buy a Houston home, let us refer you to local, trustworthy lenders in the Houston Energy Corridor! Obtaining the expert advice of the KW Energy Corridor Team is the first step in a successful home purchase! We will provide you professional guidance throughout the process.
KW Energy Corridor Team
11757 Katy Fairway | Suite 930
Houston, TX 77079