Why You’re In Danger of Closing Delays

Closing delays are one of the many unintended consequences of recent government regulation.  Mortgage lenders are required to prepare a “Closing Disclosure” and adhere to the timelines illustrated below.  Any last-minute changes to your deal structure could cause delays of up to a week on purchase transactions, and up to two weeks on refinance transactions. Delays can be even longer if your transaction takes place anytime close to a federal holiday.

Here are five things you should consider doing in order to avoid unnecessary delays:

1. Write a longer timeline into your purchase agreement so that you don’t have to amend the purchase agreement later on.
2. Make sure your purchase agreement is properly worded if you have seller concessions or seller-paid closing costs (last-minute changes will re-set the timelines back to the beginning).
3. Lock your interest rate for a longer period of time because rate lock extensions are likely to trigger new disclosures and re-set the timelines back to the beginning.
4. Schedule the inspection and the appraisal as early in the process as possible in order to give yourself and the seller enough time to make adjustments if necessary.
5. Turn in your paperwork ASAP so that unforeseen issues don’t cause more delays.

As you can see, it’s more important than ever for you to work with a skilled lender!  Please contact me for more details.

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Source: CMPS Institute

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Figure: 7 TAC 80.200(b)

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