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Seller Says; “Our Buyer Was Pre-Approved, Why Can’t We Close On Our House Now?”

Loans
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Your buyer had a Pre-approval from a reputable lender and now 2 weeks before closing the buyers attorney is cancelling the deal because the lender won’t give they buyers their loan.  What happened?

Unless your buyer is paying cash every lender is going to need time to take the paperwork from the Pre-approval stage to the loan commitment stage.  Lenders start the loan commitment process once the buyer has an accepted contract on a particular home.  So as the prefix Pre means “prior to” or  “early” the approval or qualification is preliminary.  This is true for most lenders, only a few will do full underwriting approvals up front and even with that the home still needs to pass the next step, appraisal. In the appraisal process the lender is ensuring that the house is worth what the buyer is spending after all it’s their collateral for the loan.

The lender is also going to re-verify there have been no changes to the buyers financial situation since the Pre-approval.  This is where some buyers make the mistake of buying a house full of furniture or a new car before they have closed on their purchase of the home.  Big purchases can change their debt to income ratio and make them unable now to qualify for the loan.  On average it takes a lender 30 days to complete the re-verification of documentation and appraisal. Everyone focuses on the closing date but in real estate your  loan commitment date is way more important!

In the world of mortgages it’s just the nature of the beast but that certainly doesn’t make it any easier we know! Good news is when you have experienced agents and lenders your odds of all things working out certainly goes up!

Our Best Always,

Nicole and Tony Tudisco

Wheatland Realty, The Cure for the Common Agent

 

 

 

 

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