December 15th, 2014
So you’ve made an offer on the house, and now you are just waiting patiently for that closing date to arrive. However, as that day edges closer, there is a good chance that you will not close on time. In fact, according to Fannie Mae, you have a 78% change of this happening. Sounds crazy, right? Well, it’s true, and if you are using the wrong lender, the chances of a late closing only increase. Keep reading to find out why you don’t have to accept excuses for late loan closings.
The Truth about Common Excuses
You are likely to hear plenty of excuses as you move down the path towards your closing date. While there are some that may be legitimate reasons for the delay, many others are not, and you shouldn’t have to deal with them.
“Underwriting is asking for a few additional conditions.”
This is another response that can go both ways. Many underwriters need additional information to complete the process, especially as the closing date gets closer. This can include paystubs and other time sensitive information that they have to make sure hasn’t changed drastically during the previous month.
This can also be the case if the person applying for the loan is not providing the correct information – i.e. The underwriter asks for a paystub and receives a bank statement. However, if neither of these conditions exist, this is just another excuse used to delay your closing date.
“We’re backed up with end of the month closings; so unfortunately, it’s going to be a few extra days.”
Again, there is a chance that this is a legitimate issue if your closing date is at the end of the month. If not, you are just receiving another excuse that doesn’t hold water. While underwriters have hundreds of loans to go through, they are typically not the only person handling this job for the lending company, which means they should be trying to make the effort to keep up with the closing schedule.
What is the Average Time to Loan Closing?
Contrary to the typical 30 day closing timeline, the average number of days between applying for the loan and it clearing is 49 days. This is where the 78% of loans that don’t close on time fits in – that additional 19 days causes quite the backup for realtors and homeowners everywhere!
Why Mortgage Companies Delay Loan Closings
While there is no real benefit for the mortgage company to delay the closing, the high rate of late closings does make it seem as if there must be some benefit in play. The real reasons for this could be due to someone somewhere simply dragging their feet, or the fact that many people receive an hourly wage, which means the longer they “work” on processing the application, the more they make each week.
If you are a realtor or borrower, and tired of dealing with all the excuses that delay loan closings, Summit Funding is your answer. Our average is only 29 days, which means that we are up to three weeks faster than the national average. If you want your loans to close on time, we can make it happen.