When financing falls apart ...

You're just days from closing and no one seems to know where your loan docs are. What are you going to do now?!

First and foremost, please don't read your agent the riot act about this. It is not their fault. It is a financing/loan/mortgage officer issue. Of course if you're working with a good real estate agent, they will proactively step in to light fires in the approrpriate places to ensure expeditious handling of your transaction.

Unfortunately, sometimes this is simply not enough. It would behoove you to always have a back-up plan option in place in the event your financing falls through. Not to mention, it is always a good idea to get a pre-approval with more than one lender/mortgage professional. I recommend getting at least three good faith estimates (see Blog titled: Shopping for the best rate and term).

The good news is there are lenders that funds their own loans. Often such lenders can prepare docs in-house, which significantly reduces the timeframe for getting docs to escrow and getting your deal closed. The better news is we have such lenders in our local area.

If you do have to switch course for financing mid-stream, be sure to obtain a copy of your appraisal report from the original mortgage company and/or lender. You have a legal right to this information, and it will enable the new lender to not have to order a new appraisal, which would then cost you money in addition to time, which you likely don't have at this point.

If you decide to move forward with an alternate in-house lender, you may still be able to close your deal on-time with at least a one week lead time. If you have less time than that, your agent can go to bat for a closing extension. All's well that ends well, so be sure you have people working hard to make things end well for you!

For more information about in-house lenders or if you have a related experience, feel free to contact me or post a comment.

Your success is my business,

Brad