August 25, 2023
Do you know about the issues that can interfere with your closing day? It does not matter whether you were approved for a conventional, FHA, USDA, or VA mortgage. Some issues are common no matter which loan option you choose.
FHA Down Payment Issues
Once you have saved the money for your down payment, you are ready to close, or at least that’s what some might be tempted to think.
But a key part of the closing process is knowing how that down payment must be paid. Typically you cannot use checks, credit cards, ATM cards, or cash.
Borrowers must arrange a wire transfer or a cashier’s check to make the down payment.
Discrepancies In Your Closing Disclosure
Contact the lender immediately if you find errors or discrepancies in your closing disclosure. Those are problems that could interfere with closing day if they aren’t caught in time.
Inaccurate FHA Loan Documents
Borrowers only have three days before closing to review all pertinent documents, and you want to know everything is correct.
That includes ensuring your entire name, and any other personal details. Double-check that the address of the property you are buying is accurate on all closing forms.
Major Financial Changes After Loan Approval
FHA lenders aren’t the only ones to check your credit after the loan has been approved.
This is a common industry practice that is designed to detect situations where a borrower approved for the home loan later applies for new credit, has a career change, or otherwise alters their finances in ways that were not a factor at loan approval time.
Losing a job or quitting a job in the process of closing is not something you can legally keep secret. Applying for a new car loan before closing day is something your lender will detect with another credit check, and the same is true if your FICO scores take a hit before closing day.
There may be legal consequences for not being transparent in such cases. In some circumstances, a co-signer may be required. In others, the lender may reconsider the whole loan.
Beware Of Wire Fraud Scams Ahead Of Closing Day
If you are about to close on an FHA home loan, you may be more vulnerable to wire fraud scams.
Homelight.com warns that scammers may try to “impersonate the title company and send fraudulent wiring instructions via email for buyers to wire their down payment and closing costs to.”
Protect yourself by verifying all wiring instructions “over the phone with your title company and lender before wiring any money.”
Wire fraud is a common mortgage problem in the industry. Talk about this issue with your loan officer before it’s time to arrange the transfer.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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