Surprise, surprise: your closing date has moved, again!
It seems like everyone is refinancing their mortgages right now. Well, not everyone. I imagine that other countries are not experiencing the same phenomenon of low rates that we are experiencing now. However, I can assure you that the mortgage industry here at home is experiencing record numbers in volume due to the current market. It is a great opportunity for many people to save a lot of money and in the long term. However, since everyone and their cousin are trying to refinance right now, it’s creating some logistical difficulties.
Think about it. It’s not just lenders that are swamped with business right now. So are all the vendors they do business with to close the loan. That means appraisals take longer to complete, and title companies struggle to coordinate title searches and loan closings. Even the most obscure providers, like credit reporting agencies, are behind it. Let’s say you want to update a customer’s credit report to remove erroneous information. Guess what? It’s taking longer than ever to do it.
Because of this huge excess, lock-in periods for loan rates are often longer than usual. A lock-in period is the period of time in which you must close your loan to lock in that fabulous interest rate that got you to commit in the first place. Lenders have to set realistic expectations for their clients. How can you close a loan in five days if you don’t have the appraisal back? You see, some things are out of your lender’s control. Realtors are well aware of the limitations lenders face these days. They make sure to also set realistic timeframes when negotiating purchase contracts for buyers.
There are so many moving pieces to the loan closing puzzle. Everything has to be coordinated so that everything goes well. That means that you, as a customer, also have certain responsibilities and obligations. For example, deliver the requested documents to your lender as soon as possible. If you dawdle, you can get in trouble. You see, your lender has a whole portfolio of loans, just like every other mortgage lender that works for that particular company. All of these loans have to be reviewed by an underwriter. So basically your loan has to take a number. And if you’re not on time, your loan can end up in a very, very, very long line. Most people want their loans to close by the end of the month or in the first few days of the month, so you can imagine the huge glut and backing that occurs. So be prompt and responsive to your lender’s requests to allow everyone time to do their jobs.
The moral of the story is to listen to your lender and keep an open line of dialogue. Keep him abreast of changing situations. Email is a great tool to use in accomplishing this purpose. It only takes a minute or two and can save everyone a lot of headaches in the long run. And if your loan closing date changes, take heart. It will close, eventually.
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