Learn how to avoid the most common mortgage delays and keep the home buying process running on schedule
Most Mortgage Delays Can Be Easily Prevented
With all the paperwork, red tape, rules, and regulations involved in the home buying process these days, sometimes mortgage delays are unavoidable. Sometimes a mortgage delay is beyond our control. But more often than not, a delay in the mortgage process is not only within the home buyers control, it may be caused by the home buyers themselves. Even the Best Loan Officer in Salt Lake City can’t do anything if the borrower takes two weeks to send in the required documents with their loan application!
Recently I sat down with Danny Young, a mortgage Loan Officer with Academy Mortgage in Salt Lake City, UT to find out what causes most mortgage delays. Danny and his team at Academy Mortgage are some of the best in the mortgage business… but they aren’t magicians. If you don’t give them the documents and info that they need to do their job, their hands are tied. Learn these 10 most common causes of mortgage delays so you can do your part to help your lender get your home loan processed quickly.
Why Should You Care About a Small Mortgage Delay?
A delay in the mortgage process is problematic because the purchase of the home is basically fully dependent on the mortgage going through smoothly and timely. A mortgage delay of just one week can cause the home buyer to need an extension of their closing deadline; which the seller may not be willing, or able, to grant. If the seller has made plans to move out and buy another home of their own based on the closing deadline agreed to when the purchase contract was signed, they may be greatly inconvenienced by your mortgage being delayed. By making their situation more difficult, they may not be willing or able to grant you an extension if you need one. In situations like these, it is so important to have a great real estate agent handling things on your behalf. Make sure you choose a real estate agent with experience successfully resolving “difficult” deals, just in case. After all, “a calm sea never made a good sailor.”
Somewhat recently, I had a home buyer client who had some serious mortgage delays, which meant they needed an extra two weeks in order to finalize their mortgage, and close the purchase. Their delay caused a chain reaction with the sellers, and the home they were buying, and so on, and so on. In the end, SIX different transactions were delayed because of one buyer’s mortgage delay. Spoiler alert: it all worked out, for everyone involved. BUT… while we’re extremely grateful that we held these transactions together, we were somewhat lucky. This chain reaction of mortgage delays caused by just one loan could have easily ended badly. This is why it’s so important to understand the most common causes of mortgage delays, so you can avoid them like the plague, give your lender the tools they need to succeed, and close the purchase of the home on time.
The infographic below shows a brief list of the 10 Most Common Causes of Mortgage Delays. For more detail and explanation of each one, see the full list below the infographic.
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The Top 10 Causes of Mortgage Delays
- Slow to submit requested docs to the lender (Pay Stubs, Tax Returns, copy of drivers license, etc). Again, if you take 10 days to give your lender the pay stubs they asked for at your first meeting, you’re asking for a delayed mortgage.
- Not accepting eConsent authorization upfront – The mortgage industry is one of the most heavily regulated industries out there. As a result, your lender needs you to e-sign an initial authorization which gives them permission to look into your credit, finances, etc to determine if you qualify for a mortgage or not.
- Delay in signing initial loan disclosures – the process can’t move forward until disclosures are reviewed and acknowledged.
- Processing and Underwriting not done in-house or out of state – If you lender needs to wait for someone in another office, or even in another state, to complete certain things, delays almost always occur. (Danny’s processing and underwriting is done in-house, at his office. This is the most efficient and quick way to process a mortgage).
- Delaying ordering the inspection – schedule your home inspection immediately after you go Under Contract on the home. The quicker you get that done, the sooner you’ll know if you truly want that home, and the sooner you can order the appraisal.
- Delays ordering the appraisal – right now in Salt Lake City, Utah appraisals are severely backlogged, and are taking 7-14 days to get the report back. If you waited 2 weeks before ordering the appraisal, and you had a 30 day closing deadline, you are almost guaranteed to need an extension.
- Making purchases on Credit after going under contract – DO NOT go out and buy new furniture, washer and dryers, a new car, or put ANYTHING on credit without first talking to your lender about it. A new purchase on credit can throw your debt-to-income ration out of whack, or negatively impact your credit score, which could actually disqualify you from getting a mortgage! Disaster!!
- Cash Deposit in bank accounts – Cash is hard to source, and your lender needs to be able to document where the funds came from. Ask a lender for clarification.
- Sourcing Large Deposits in bank accounts that are not pay roll checks – Everything has to be sourced, and any delay in getting your lender a copy of the checks deposited can cause a mortgage delay.
- Expired Drivers Licenses and ID’s – Your IDs can’t be expired before closing. Make sure you plan ahead and check your expiration dates. Unfortunately, If you walk into closing with an expired ID, you will not be walking out with house keys.
There you have it folks, the 10 Most Common Causes of Mortgage Delays. As you can see, these mortgage delays are all preventable and avoidable. All it takes is a little planning ahead. If you plan to buy a home soon, it would be wise to start gathering your tax returns, pay stubs, bank statements, W2’s and/or 1099’s. Then you can move quickly right from the start, and hopefully even close early on your new home 🙂
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About the Author: The above article on How to Avoid the 10 Most Common Causes of Mortgage Delays was provided by Dustin Brohm, a leader in the field of Real Estate sales, marketing, smart home technology, and social media. He is also the host & creator of a new show called Salt Lake Insider, found on YouTube and Facebook, and HERE on this blog.
Dustin can be reached via email at d[email protected] or by phone at 801-455-8753. Dustin has helped many people buy and sell Salt Lake City area homes for years.
Thinking of selling your home? I have a real passion for buying and selling Real Estate, as well as marketing, social media & smart home technology. I’d love to use my expertise to help you sell your home!
I help people buy and sell real estate in the following Salt Lake area cities & neighborhoods: Holladay, Cottonwood Heights, Millcreek, Olympus Cove, Canyon Rim, Sugarhouse, Midvale, Murray, East Millcreek, Sandy, White City, Draper, Riverton, Daybreak, South Jordan, West Jordan, Herriman, Bluffdale, South Salt Lake, The Avenues, Federal Heights, and of course, Salt Lake City.