Learn Some of the Most Common Ways Your Lender Could Hold Up Your Closing – and How You Could Prevent It
Even if you are the most qualified buyer ever, delays on the lender’s end may prevent you from closing escrow in a timely manner. There are a few things you can do to stop them, but it can be annoying for everyone involved. Most importantly, be aware of potential roadblocks and prepare for them. Keep reading to learn more and review escrow resources from Neighborhood Escrow if needed.
Finding the source of the funds is a frequent problem for the lender
In some situations, a lender could insist on getting proof of the borrower’s source of cash for the earnest money, closing costs, and down payment. The lender may believe that their risk is larger and the loan can be delayed if the buyer cannot provide an easy and transparent paper trail that demonstrates where the money originated.
Make sure you have the documentation necessary to prove the source of the down payment if you are the buyer. Ask the estate’s lawyer for documentation proving that the money came through an inheritance if that is how it happened. Ask for a canceled check from the family member who provided it to you if it was a gift and confirmation that it wasn’t a loan if it was. Be prepared for a possible slowdown.
When a lender delays closing, the seller has rights
If the lender is holding up the sale of your house, you could reasonably become frustrated. The good thing is that you have rights, so you can do more than just vent your annoyance. Ask how long they need if the buyer is merely taking their time submitting the required paperwork. Then make a penalty to speed up the process of getting the documents.
For each day the sale stretches past the day you both agreed to close, for instance, you could impose a fee. You will need to obtain written consent for this. A notice to perform may also be issued, but this can be challenging. In essence, the buyer has just 48 hours to fulfill the requirement; else, the sale may be terminated. As you can see, this choice carries a lot of danger.
Avoid letting an escrow company be the cause of the delay
In order to ensure that we are not delaying the closing process, Neighborhood Escrow knows how to get its ducks in a row. You can reach us at 310-378-2456 if you need to open escrow, have any escrow-related questions, or for any other reason.
