02
Oct
By Fred Gruber
Home Buyer Tips

What Happens When Your Closing Date Gets Pushed Back?

You scheduled the movers, arranged time off work, started packing, and expected to receive the keys on Friday. Then you learn that closing needs to be delayed. Even a short change in the closing date can affect more than moving day, which is why buyers should understand what may need attention when the timeline changes.

The Mortgage Timeline May Need Attention
A mortgage transaction contains several items tied to specific time periods.

Depending on the circumstances, a closing delay could affect documents, verifications, or other time-sensitive portions of the loan process.

One important example is an interest rate lock. Rate locks generally apply for a defined period. If closing moves beyond that period, buyers should find out whether an extension is necessary and whether any cost or other conditions are associated with it.

Your Cash-to-Close Numbers Can Change
Changing the closing date can sometimes change certain amounts shown in the transaction.

Prepaid interest is one example because the amount can depend partly on the date the loan closes. Other prorated items associated with the transaction may also need to be recalculated.

That means buyers should review updated closing information rather than assuming every number will remain exactly the same.

The Moving Plan May Need to Move Too
The financial side is only part of the inconvenience.

Movers, utility transfers, deliveries, time off work, temporary lodging, and the end of a lease may all have been scheduled around the original closing date.

Whenever possible, avoid creating a schedule that leaves absolutely no flexibility between closing and another major deadline. A small cushion can be extremely valuable if the transaction shifts by a day or two.

Do Not Assume You Have the House Until Closing Is Complete
Buyers can understandably become excited once the closing date is placed on the calendar, but it is important to remember that the transaction still has steps to complete. Avoid making irreversible plans based solely on an anticipated closing date.

If a delay occurs, ask what caused it, what remains outstanding, and whether anything is needed from you. Also confirm whether the change affects your mortgage, funds required, rate lock, insurance, or other arrangements.

Most buyers hope for a perfectly predictable closing. Real estate transactions, however, involve multiple parties and moving pieces. Planning for a little flexibility can make an unexpected delay far less disruptive and help keep the focus where it belongs: successfully completing the purchase and getting the keys.

30
Sep
By Fred Gruber
Mortgage Tips

Why Changing Jobs for More Money Can Still Complicate a Home Purchase

Getting a new job with a higher salary sounds like good financial news, especially when you are preparing to buy a home. But if the change happens while you are applying for a mortgage, the timing can create additional questions. Mortgage qualification is not based solely on how much you earn. Lenders also evaluate the stability, history, and documentation of the income being used to qualify.

Higher Income Does Not Automatically Mean Easier Approval
A substantial raise can strengthen a buyer’s finances, but a new employment situation may need to be reviewed before that additional income can be used.

The type of compensation matters.

Moving from one salaried position to another may be relatively straightforward in some circumstances.

Changing from salary to commission, becoming self-employed, accepting variable hours, or moving into another compensation structure can require a different evaluation.

That distinction can matter even when the new position has greater earning potential.

Timing Can Create Extra Documentation
Employment and income are typically verified during the mortgage process.

If you change jobs after applying, the information originally provided on your application may no longer reflect your current employment.

Additional documentation may be required. Depending on the situation, that could include an offer letter, updated employment verification, or evidence that the new job has started.

Requirements vary based on the loan and circumstances.

A Career Change Can Be Different From a Job Change
Not all employment changes are viewed exactly the same way.

Moving to another employer while continuing similar work can present a different income history than changing industries, switching compensation structures, or starting your own business.

That does not mean buyers cannot make career moves while purchasing a home. It means the effect should be understood before making the change.

Talk Before You Give Notice
One of the simplest ways to avoid an unexpected mortgage complication is to communicate before changing employment.

If you are under contract or actively applying for financing, discuss the potential change with your mortgage professional before resigning from your current position.

Provide the details of the new job, including the anticipated start date and how you will be paid.

A better-paying opportunity can be an excellent career decision. The goal is not to avoid advancement simply because you are buying a house. It is to understand how the timing and structure of the change could affect your financing so that a positive career move does not create an unexpected problem before closing.

15
Jul
By Fred Gruber
Home Mortgages

Common Title Issues That Can Delay Your Home Closing

When you’re in the final stages of buying a new home, it’s easy to assume that everything will go smoothly from here on out. However, one of the most common obstacles that can arise in this final stage of the process is title issues. If not addressed, these can delay your closing or even derail the sale. 

A “cloud on title” or “title defect” refers to any issue that prevents a property’s title from being transferred smoothly from the seller to the buyer. Title defects often surface during the title search, a standard process that ensures the property’s title is clear and ready for transfer. The most common title defects include liens, easements, or prior claims on the property, any of which can delay or prevent a sale from going through.

Understanding the Title and Its Importance

When you own a property’s title, you have the legal right to control what happens to the property, whether that’s living on it, selling it, or leasing it out. A successful home purchase includes the transfer of title from the seller to the buyer, typically through the closing process, where the buyer receives both the title and the deed.

However, property rights can be restricted due to zoning laws, easements, or other legal regulations, which is why conducting a title search is so important. This search helps reveal any underlying issues that could prevent the smooth transfer of the title.

Can You Waive a Title Search?

In most cases, waiving a title search is not recommended, especially if you’re using a mortgage to finance your purchase. Title searches are designed to reveal hidden problems that could affect the ownership of the property. Let’s look at two scenarios:

When Buying with a Mortgage: Mortgage lenders require a title search to ensure the property has a clear title. Skipping this step could result in buying a home from someone who doesn’t legally own it, jeopardizing your ability to own the property.

When Paying Cash: If you’re paying cash, you technically have the option to waive the title search, but it’s still a good idea to proceed with one. If the seller has no legal rights to the property, you could be left with no ownership and no way to recover your funds.

Common Causes of Title Defects

Liens: Liens are legal claims against a property for unpaid debts. These debts could be related to unpaid property taxes, unpaid contractor bills (mechanic’s liens), or even unpaid Homeowner’s Association (HOA) fees. When you purchase a home with a lien on it, you may inherit responsibility for that debt.

Tax Liens and Delinquent Tax Bills: If a homeowner fails to pay their taxes, the government can place a lien on the property. Resolving this issue may involve proving that taxes have been paid or paying them off at closing.

Easements: An easement gives someone else the legal right to use part of your property, such as for utilities. While most easements are harmless, some can limit how you use your property and may not be immediately disclosed.

Mechanic’s Liens: Contractors who weren’t paid for their work can file a mechanic’s lien, which must be resolved before the property can be sold. This lien is attached to the property, not the seller, meaning the buyer could become responsible for the unpaid debt.

Probate and Ownership Issues: If a seller passes away before the closing, you may face delays due to probate issues. Similarly, if a property is owned by multiple parties or is part of a living trust, this can complicate the transfer of the title.

What Should You Do If a Title Defect Is Found?

While most title defects can be resolved, they usually cause delays. The best course of action is to consult with a real estate attorney. They can help you navigate the process and make sure that the title is cleared before you move forward with the purchase. It’s important to address any red flags early, as ignoring them could leave you with costly debts or legal issues down the road.

A smooth closing process is something every homebuyer hopes for, but title issues can create unexpected roadblocks. By being aware of common title defects and working with professionals to resolve them, you can help ensure that your closing goes as planned. Remember, no lender will approve a mortgage for a property with unresolved title issues, so it’s crucial to clear any problems before proceeding with the purchase.