Once you've found a home that you want to buy, you'll need to make sure that your home purchase ends up happening by the closing day. Rate locks on mortgages are often valid for a specific number of days, and a delay could cause you to pay a higher interest rate if you do not close in time. These tips will help you avoid potential delays.
Don't Make Big Financial Changes
A common problem that homeowners run into is making significant financial changes before they close on their home. Your mortgage lender could check your finances again before your closing date, and if they see big financial changes, it could cause a big delay in getting your mortgage approved.
For example, you may be planning on doing a lot of home improvement work once you move in, so you preemptively opened a credit card at a local home improvement store and purchased everything that you need to get going on the first day. You could need a second car due to the home's location, and received financing prior to closing on your home so the car is ready. These big financial changes could cause a lender to possibly deny you funding, especially if the purchase increases your debt-to-income ratio above acceptable levels.
Check For Errors In Paperwork
The title company should send the paperwork to you prior to closing on the home, and you or your real estate lawyer are responsible for checking it all before you sign the documents. If you wait until the day of the signing to check the paperwork, you could discover an error that must be corrected. If that error cannot be corrected in time, it will delay the entire closing process.
Errors could include having the wrong address on the land survey, your lender not having the appropriate APR on the mortgage documentation, or a person's name being misspelled on the official deed to the home. Even tiny errors can take a long time to correct.
Not Having Everyone Present At Closing
Emergencies can come up that prevent a party from being present for the closing on the house. If so, the necessary paperwork will not be signed. You can give your lawyer power of attorney before the closing date, which will allow them to sign the documents for you in case you can't attend. Hopefully, you'll be able to attend and sign everything yourself, with assigning power of attorney being a backup.
For more tips on avoiding closing delays, ask your real estate agent.