San Diego CA - During a typical 30-day escrow period in San Diego, there is ample opportunity for a potential home buyer to unwittingly sabotage his or her deal.
Remember that lenders are approving a home loan based on a snapshot of the buyer's qualifications and until the keys are in the buyer's hands, there are still several things that can cause a deal to unravel, even at the very end.
Credit Issues:
These days, a buyer's credit is monitored until the end. This goes for FHA, VA, Conventional and Jumbo financing.
Not only will the lender find out if a new account is opened, but also if anyone else even inquired into the buyer's credit after the lender's credit inquiry.
If the new furniture will require financing, best bet is to wait until the mortgage loan is closed. If the new home's garage is incomplete without a new car, wait until the mortgage loan is closed!
Assets:
Many conventional loan programs require a minimum amount of assets or reserves in the bank. Although FHA and VA loans do not have minimums, some loan approvals are given based on compensating factors such as money in the bank after closing.
A loan may be approved based on an older bank statement with a certain amount of cash in the account. However, the approval might require that the most recent account statement be provided. If the new balance is lower, this could jeopardize the loan approval EVEN if there is still sufficient money in the account to cover down payment and costs.
Employment:
Changing jobs during an escrow is always an obvious no-no. But sometimes internal changes can destroy the deal. Examples include being switched from an employee (w-2) to an independent contractor (1099), or compensation switching from salary/hourly to commission.
And lenders will call to verify that the buyer is still gainfully employed right before they hit the big "fund" button.
Just two days ago, Thursday January 29th, my funding department called to verify that a refinance client was still employed. NOPE! She quit her job 2 weeks ago (and did not let us know) with plans of not working this summer. She admitted to me today that she had planned to quit three weeks ago when we started the process.
If you anticipate a job change, let your lender know!
I think every loan officer has had a loan die, or have a closing significantly delayed, from one or all of the above. Properly prepping buyers at the beginning helps, but sometimes you can only do so much. However, buyers (and homeowners in the middle of a refinance) should provide items requested by their lender ASAP and also keep copies of these items readily accessible just in case!
It is OK to celebrate, after you close!
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