Common causes of mortgage delays

Most Common Causes of Mortgage Delays

With all of the moving parts of a purchasing a home, sometimes mortgage delays are unavoidable. But more times than not, mortgage delays are within the home buyer’s control. In fact, most are caused by the home buyer, even though it’s rarely their intent.

Don’t Let Mortgage Delays Slow the Home Buying Process

With a delay in the mortgage, the close date likely has to be pushed out, which the seller may not be willing, or able, to grant. Mortgage delays can also put pressure on the home buyer to find somewhere to live temporarily if they agreed to move out of their previous home or apartment based on the original close date. Take a look at these common causes of mortgage delays.

5 Home Buyer Mistakes that Cause Mortgage Delays

Slow to send requested docs to lender

Before you start the home buying process it’s important to know where all of your paperwork is. Whether you keep you taxes in a file cabinet, a shoe box, a safe or you store copies electronically, it’s critical to make sure you have several different documents that will be requested (possibly even more than once) by most mortgage lenders:

  • Past 2 years’ tax statements and W2s
  • Most recent pay stubs (at least 2)
  • Divorce, alimony, child support or similar decrees
  • Business paperwork (proof of ownership, LLC, partnership documents, etc.)
  • Proof of sale of formerly-owned properties
  • Proof of home owners insurance
  • Any paperwork relative to income you are relying on to qualify

If you make a point to get all of these documents ready before hand, your lender can move on to the next step in your mortgage faster. This also gives you time to request additional documents if needed.

Not signing e-consent forms in a timely matter

E-form should be signed as soon as possible, preferably no more than 24-48 hours after they’ve been sent to your email. The home buyer is often not the only person who has to sign these forms, so by waiting to e-sign, the rest of the signers have to wait as well. It’s a good idea to have smartphone or computer email alert notifications turned on for the length of the home buying process, so you are able to see important docs as soon as they are sent. If it’s taking you days to see an urgent message, your mortgage could be delayed.

Making large purchases after going under contract on a home

If possible, don’t make large purchases while you’re under contract to buy a home. This can flag your account with your mortgage lender or underwriters who will then review whether that impacts your ability to qualify or ask questions such as “do they have another bill they are paying but didn’t report?”

If you have to make a large purchase consult with your mortgage lender first and see the best way to proceed. If you make a large purchase without getting an OK from your lender, it may cause mortgage delays since your lender has more questions to answer. You may also have to provide even more documentation showing where you bought the item and what money you used to make the purchase.

Cash deposits  

Cash is hard to source, so your lending agent may require you to document where cash deposits come from. If someone has gifted you cash to help pay for your down payment, it’s OK, but it just takes more time to process the mortgage. The person who gifted you money may be required to fill out a form and provide their own bank statements to the lender showing that the money left their account and entered yours in a timely fashion. Informing the gifter that they may need to supply this documentation can help you avoid mortgage delays related to cash deposits.

Expired I.D., Passport or Driver’s License

To successfully sign your closing documents, you must have a valid form of photo I.D. If you are just realizing that your license is expired or your passport has lapsed, you could delay your closing due to the waiting period for new documents.

Do you have more questions about the mortgage process? Contact us – we would be happy to answer them! 

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