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Offer Accepted Yet it Feels Like It’s Taking Forever for Your Loan to Close – Why?

Offer Accepted Yet it Feels Like It’s Taking Forever for Your Loan to Close – Why?

It’s finally happened: the seller of your dream home in Philadelphia accepted your offer and the contract has been signed. It feels like the signing should be the end of the process, especially after all you’ve gone through to get the home. But getting your offer accepted and going under contract is just the beginning of the end of the sale as the lender takes over the sale process. The lender has requirements that need to be satisfied before it agrees to fund the loan. Read on to learn more about what happens between going from contract to settlement and how a Philadelphia mortgage company can help you with buying a home.

Signing the Contract and Meeting Its Conditions

When the buyer and seller sign the contract, they agree to conditions set out in the contract. Those conditions include a home and termite inspection, both of which are usually performed separately and completed by a date set in the contract. The termite inspection, or wood infestation inspection, is usually required by lenders. Talk with a Philadelphia mortgage company to learn more about why it’s something that has to be done. The buyer has to review the results of the inspections and decide to negotiate with the buyer, accept the seller’s price, or walk away from the sale.

It may be possible to get these inspections done early on in the contract process, but it won’t necessarily change the date for closing. Other processes need to start and conclude satisfactorily before the closing can occur.

Getting the Mortgage

In the event the buyer has a letter of pre-approval before buying the home, the Philadelphia mortgage funding process moves more quickly than without. But if the buyer has to get a mortgage after making an offer, the lender has to go through the credit verification and underwriting process which adds more time to the closing. A pre-approved loan spends less time waiting for funding because the credit check and underwriting has been done. However, the lender will appraise the property to make sure that it’s worth the amount that the buyer is asking to borrow.

All of this takes time to complete, even with pre-approval, and the contract has something known as a mortgage commitment or contingency date. This date is put into the contract to allow the buyer enough time to secure a mortgage. If a mortgage cannot be secured, the buyer can back out of the transaction.

Getting a Title Search and Insurance

Buying a home means getting the title to the property. The title is a document that lists the previous owners of the property and any previous ownership claims that weren’t removed. It also shows outstanding liens that were put there via court action. All of this is performed through a title search which requires due diligence on the part of the researcher. The person who researches the title has to trace all previous owners and make sure they have no interest in the property, find covenants and easements that restrict use of the land, make sure all allowable uses are permitted by law, and uncover outstanding liens or unpaid taxes. This is another time-consuming process as historical information isn’t always available online which requires a physical visit to the relevant offices by the researcher.

A title search may come back with no problems, but title insurance is still necessary. It protects the buyer from a financial loss that comes about from a defect in the title that wasn’t found through the search. Getting title insurance takes about two weeks, but this can vary depending on the type of property being purchased.

All of these processes take time and for good reason: the buyer needs to have all processes finish smoothly and as planned in order to close on the date laid out in the contract. Rushing any of these processes can result in problems later. It’s better to be patient, talk to your Philadelphia mortgage broker about the closing, and be secure in the knowledge that there are no surprises waiting for you down the road.

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