5 Things That Can Affect Your Closing Date
In football, it’s the Superbowl; in baseball, it’s the World Series; and in real estate it’s the closing. Your real estate agent and your lender professionals work together and they know exactly what must get done before your closing day. But face it, no one’s perfect and mistakes happen.
This may seem like a trivial matter to your lender if your closing must be delayed by a day or two. It really isn’t an emergency to them, but it may be to you. Have your scheduled time out of work for the closing and moving? Did you schedule movers? Are you committed to vacating your current home by a certain time? To a buyer, these things are not trivial.
Unfortunately, a lot can go wrong to mess up your closing. The following are things a borrower needs to know that could delay or cancel their closing date. Avoid any action that will affect your credit status.
1. Don’t apply or get a new credit card.If you want to bring your mortgage closing to an immediate halt, get a new credit card. Even opening an account without charging anything to it can be a mistake. Retail stores often offer discounts to customers who apply for store credit. Many consumers will take advantage of the discount especially if they are purchasing items that they will need for their new home. Don’t do it!
2. Don’t take out an auto loan. For example, the borrower takes out an auto loan a week or two before the closing date and does not tell the lender. Later, the borrower misses a payment or two and the mortgage holder goes back and reviews the borrower’s credit report and discovers the loan. This is a problem. You have over extended your credit and you are not able to pay your mortgage. For this reason, at the last possible moment, most lenders will go back and check your credit records for activity and new accounts you may have opened. If there are any changes to your credit record, this will certainly delay if not cancel, your closing.
3. Leave your credit cards in your wallet. Don’t put new charges on your current credit cards and run up your balance. Yes, you’re excited about your new home and you’re having a great time buying thousands of dollars’ worth of appliances, furniture and yard equipment. This is another surefire way to mess up a closing. So, leave your credit cards alone! In fact, if you can, pay everything in cash until after the closing.
4. Do Not Change Jobs. Changing jobs or switching from a salaried position (W-2) to some other kind of compensation (1099) where your primary income comes from commissions or bonuses, is another given that your closing may come to a standstill.
5. Don’t assume. One of the most common closing problems is an error in documentation. Something as simple as a name misspelled or numbers transposed in an address could cause a delay. Several days before closing, check in with your real estate agent to make sure they are in communication with your lender and that the lender has everything they need. Also ask to review all documents your lender has prepared to assure that the information is correct and no errors were made.
Think ahead to avoid problems. Understand what might go wrong and stay on top of the process with your realtor and lender to help avoid a delay or cancellation of your closing. Your closing day is a time for celebration not disappointment.