HBU - Last Minute Drama

  You may think that, as your closing day approaches, the wild ride that you've been on will be slowing down and coming in for a landing. Not so much... 

Often the days just before closing are even more stressful, frustrating and crazy than the rest of the home-purchase process put together. It can feel more like a frantic slide into home plate than a jog around the bases after you've knocked it out of the park. Don't worry, this perfectly normal and everything will most likely work out in the end. Reading this should help.

At least 3 days before closing - make sure these are happening:

• You've been asked to sign a copy of the closing disclosure
• Bank has done a final proof of employment
• Title search is completed
• Loan is in underwriting department and they've started asking question
• You've got insurance to cover the property and have given a copy of the binder to the lender

At the last minute, issues may come up that you'll think should have come up weeks before. These things happen a lot:

• You get dozens of calls from the loan officer and underwriting department asking for documents that you know you've sent at least twice. Just smile and send them the paperwork. Even in this electronic age, stuff gets lost and people make mistakes. Keep a file of the paperwork that has been requested by the bank so you'll have it handy when they request it again. 
• Something got missed. The bank or the attorney or someone forgot to ask for a document or forgot to do a vital piece of the process and suddenly, it's your problem and you're running around trying to do in an hour, something that will obviously take at least a full day. Now is the perfect time to take a break. Sit down. Take a deep breath. Visualize yourself moving into your new home. Now you're ready to tackle this task and it will flow like butter. Believe it.
• Letters, letters, letters. The lender starts asking you to write letters to explain this, that and the other thing. Just write and smile. 

These things can happen but are less common:

• A cloud is found on the title. The seller - or a past owner of the property - had a loan that wasn't properly discharged or caused a lien to be placed. Sometimes the attorneys can resolve this before the closing. If the seller has title insurance, you may still be able to close even if the cloud can't be removed in time. In rare instances, you may have to delay taking possession until it can be resolved. This is almost always a problem that can be fixed.
• You can't get insurance. An issue with the home makes it uninsurable. This can happen if there was a major claim in the recent past that makes insuring the home too risky for the insurance company. You should be able to walk away from the purchase as you won't be able to get a loan if you can't get homeowners insurance.
• The lender takes issue with the source of some of the money that you're using to buy the house.  See  this article  on seasoned funds. This can usually be handled with letters of explanation but in rare cases, you may not be able to use this money toward the downpayment.
• The sellers decide they don't want to sell the house. This hardly ever happens but now, with the purchase process taking longer and home prices going up and up, some sellers may think that if they sold the house to someone else, they can get more money. They may have even been offered more money already. This can get ugly. You have a contract with the seller that can be enforced as long as you've held up your end of the bargain. Is it messy to enforce the contract? Yes. Will it take time and money? Yes. Is it worth it? Only you can answer that. 
• A natural - or unnatural - disaster affects the house. This happens: homes burn down, get carried off by floods, branches break and fall through roofs, etc. Are you able to get out of the transaction if you want? Are you able to be involved in the rebuilding process if you want? The home should be insured and should be able to be repaired. Read your purchase and sale agreement to find out your options. Most state that the house should be in the same condition that it was when you entered into the contract so you should be able to terminate the purchase if you want.
• A change in your situation means you can no longer get a mortgage. If you lose your job right before the closing, most likely the purchase will not move forward. What are the options? Do you think you can get another job right away? If so, talk to your loan officer and see how long you'd have to be in the new job before they'd consider loaning you the money to buy the house. In most cases, you'd have to let this house go and find another one. If the seller has a lot of flexibility and is extremely understanding, you may be able to postpone the closing for a few months until you can get a loan. 
• A change in your credit situation can also make you ineligible for the mortgage. This is worse because it's normally avoidable. Don't do anything during the process that will affect your credit. Don't buy a new car, pedigree puppy or lawnmower, don't make any changes that could change your credit score or ratios. 

Normally, any last-minute issues can be resolved and things will come together miraculously  in the end. If it doesn't, it's best to be zen about it and believe that a better home is out there waiting for you. I'm here if you have any questions.