From: Zillow Porchlight
By: Brendon DeSimone
The seller accepted your offer, and now you've just got to sign on the dotted line. Right?
For some home buyers, the closing day for a real estate purchase is as formal and complicated as the transaction itself. For others, it’s just a blip on the radar. Either way, there are some important things to keep in mind as you make your way to homeownership.
Your mortgage rate could expire
Mortgage interest rates can fluctuate daily, and the rate your bank quoted isn’t good forever. Instead, a bank will “lock-in” your interest rate for 45, 60 or any number of days. Once that lock expires, you may have to pay a higher rate.
Any number of issues can come up: open permits, illegal renovations, or other types of roadblocks might require the loan process to stop until resolution.
For example, a buyer in upstate New York learned at the last minute that a previous owner built an addition to the home in the 1970s but never documented it properly. It turns out it was so bad that it wouldn’t pass today’s requirements. The buyer had to hire an architect, re-draw plans, and document the issue before the bank approved the loan. And, consequently, he lost the rate he’d been quoted.
Don’t wait until it’s too late, and don’t assume it’s a smooth journey to the closing table. Rate-lock expiration can throw an expensive wrench into the closing process.
The mortgage process isn’t over yet
Some buyers think once they’ve completed the application and submitted paperwork, their loan is approved and ready to go.
Not so fast. Today, some lenders will verify income, assets or credit all the way up until the very last minute. Don’t make any major changes to your finances until the closing.
That means don’t apply for a new credit card, finance a new car, or take a new job without running it by your mortgage professional.
The smallest (even seemingly insignificant) change to your finances can affect your ability to be approved for a loan.