How homebuyers can avoid financial issues that interfere with a closing
- posted: Feb. 26, 2021
Your search for the perfect home has come to an end and the seller accepted your offer. Now all that’s left is the closing. While that’s almost the end of the process, plenty can still go wrong.
You might be worried about all the things that could happen on the seller’s side – like they change their mind or it turns out there’s a lien on the title. However, there are things that could prevent the sale from going through that have nothing to do with the seller and everything to do with you as the buyer.
Beware your mortgage lender’s credit recheck
One is that your mortgage lender backs out of the deal. This can happen for a number of reasons. Some are preventable, while you may have little or no control over others.
Getting preapproved for a mortgage can help you be more attractive to sellers. However, lenders will typically do a recheck of a borrower’s credit just before they close on the house. If you got a little ahead of yourself once you were approved for a mortgage and made some big credit card charges for things like furniture, a new car or a pre-move vacation, your lender may rescind their approval.
Moving can be expensive – particularly if you’re moving some distance or into a much larger home. However, be careful about how much you put on your credit cards before the closing.
Also, remember that you will have still have to make the down payment and cover closing costs for the sale to go through. Therefore, it’s essential to know exactly how much money you’ll need to have access to for the closing and put that aside.
What if you lose your job?
Sometimes things happen over which you have no control. Maybe you suddenly lost your job. Even if you’re confident that you’ll get another one soon, that will impact your mortgage approval.
If that happens, you need to disclose it to your lender. If you don’t, you could face mortgage fraud charges. If you’re determined to buy the home, you can ask someone like a parent to co-sign the loan with you.
These are just a few things that can, at the very least, keep your closing from going smoothly. At worst, they could derail the sale completely. Having an experienced attorney on your side can help avoid a disaster.