Once you and the seller have negotiated an offer and you’ve been pre-approved for a mortgage, you might think that you are definitely in the clear as far as closing goes. However, that is not always the case. Many surprising things can put a halt to closing. Some may ultimately stop the closing while others could simply cause a delay.
Here are a few unexpected things that can derail a real estate closing:
#1 A Job Promotion
While you might know that changing employers is the only way to interfere with the closing, another deal-breaker is 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 require a two-year history. A new job title could be a severe 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. You could quickly end up not qualifying for the loan.
Therefore, it’s likely 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.
#2 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.
#3 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.