Everyone is familiar with the children’s story “The Little Boy Who Cried Wolf”, but have you heard of, “The Couple Who Cried ‘Why Can’t We Close’?” Gather ‘round!
Once upon a time, the Smiths were searching high and low for a new home, and after several weeks, they found it! After a short negotiation, a contract was signed and a closing date scheduled in 30 days.
The duo was well prepared. They had engaged a lender before hiring a realtor, so that their financing was in place and they knew what they could qualify for. The Smiths called their loan officer, Jane, to let her know they had found a home, and that closing was happening in 30 days.
After congratulating them, Jane explained that time was of the essence, and there was now a lot of work to do since the clock was ticking. She asked them to forward all their personal and financial documentation for the loan forms ASAP. (Jane had previously itemized these documents.) The Smiths said, “No problem,” and that they would get right on it. That was a Friday, but they spent the following week celebrating and dreaming about their new home.
The next Friday arrived, but the documents didn’t. Jane called the Smiths, who replied, “Sorry! Some things came up. We’ll get it to you on Monday.” Jane left a message for the couple on Tuesday, and on Thursday, they scanned and emailed documents. However, Jane noticed some documents were missing.
At this point, Jane could at least order the appraisal, but the appraiser’s schedule was booked, so he couldn’t get out there until the following week. Soon after the appraiser left the property, the Smiths called Jane to make sure everything was in place for closing. They were shocked to learn that, because of their delays in getting Jane what she had requested, the appraisal report had not been issued and their loan approval had been delayed. As it turned out, interest rates were now slightly higher, and with only a little over a week to go before closing, there was a good chance the diligence that needed to be done on the file may not be completed by the closing date. The would-be homeowners were naturally upset, but they had only themselves to blame because they did not heed their loan officer’s request to deliver their information on time.
Fear not, kids! This story has a happy ending: the Smiths did close on time at an affordable interest rate, and they all lived happily ever after. However, it was not without a great deal of anxiety, rushing, and unnecessary pressure on them and Jane.
The moral of this story is that the worst enemy of closing a loan on time is procrastination. Closing loans in 30 days or less is more difficult than it used to be -- due mainly to regulatory red tape -- but it is not rocket science and can be routinely achieved.
To close your loan on time, work with an experienced loan officer who can refer you to a competent realtor. Have your financial documentation in order, and respond to your loan officer’s requests for information promptly. This will cultivate a strong home-buying team where all energies are focused on the ultimate goal: closing you on time! May your home-buying experience be more of a fairy tale than a horror story.