Help me not freak out!!! (Housing edition)

May 24, 2015 6:25 PM

I have an important deadline in the house buying process this week and I am totally freaking out about it. Perhaps someone wiser than I on mefi can help me not freak out about the upcoming deadlines and also tell me what is going on behind closed doors.

I'm very excited to be closing on a house very, very, very soon. But I also have to sign off on my contingencies early this week. I'm getting anxious because due to a variety of issues (the bank having trouble getting an appraiser out in a timely manner being the top of the list) the bank has not yet gotten me my loan approval letter. The deadline to sign off on my loan contingency is Tuesday and the bank is aware, and I'm really anxious I won't get the letter by then. Am I worrying for nothing? It's a small local bank with a great reputation within the community and among real estate types for doing a good job with loans. I'm dealing directly with the mortgage broker and when we spoke on Thursday he said he was aware of the deadline and working on the loan. So, I have a few questions...
1. What is it a mortgage broker does? Isn't it automated now - plugging in numbers and getting approval? Why would it take time to turn around a loan approval? (I'm not being snotty, I really want to know!!)
2. Am I being nervous for no reason? If they know the deadline and want to work with me, is there any reason why they would fink?
3. If they say they can't get me the letter by Tuesday, what are my options?
HELP!!

(Also please be kind, though I'm sure those wiser might feel the urge to be smug on this, it won't help my anxiety)

posted by Toddles to Home & Garden (5 answers total)

Best answer: The delay will be primarily, maybe purely, about not having got the appraisal yet. They can't finalise your loan offer without an appraisal, as the house might not be worth as much as you want to borrow from them, and then they are screwed if they ever have to foreclose.

If they are aware of your deadline, you don't have to worry TOO much. Unless you are a bad credit risk, they really want to loan to you, because that's how they make money. So they want to meet your deadline. If they can get the appraiser out on Monday, they can get you the letter by Tuesday. Ours came about 24 hours after the appraisal took place.

The mortgage broker doesn't really do much at this stage, but they also want the loan to go through, as they only get their commission when that happens. So they'll be putting pressure on the bank too.

If you don't get the loan letter by Tuesday, you have the following options that I am aware of
(A) go ahead with the purchase anyway on the assumption that your loan will be approved. (This is super risky. You should only do this if you are borrowing something like 50% or less of the purchase price, if you have rich relatives who would loan you the money if the bank doesn't come through, or if settlement date is months away and you have time to shop around for other banks, or if you love risks.)
(b) cancel the contract, find another house.
(C) work with the vendors to extend the deadline. Your lawyer can probably do this by talking to their lawyer, and you should tell your lawyer now that this might be necessary.
posted by lollusc at 8:00 PM on May 24, 2015

Best answer: I don't know if it makes you feel any better, but every time I've bought a house, there's been some kind of last minute scramble, almost missed the deadline kind of situation, always driven by some external party not doing their job the way they were supposed to. And it has always turned out fine. Frustratingly, it seems to me that real estate professionals rarely have the appropriate sense of urgency in these things... But it usually tends to work out in the end.
posted by primethyme at 9:26 PM on May 24, 2015 [3 favorites]

IME the appraisal & loan approval is the last thing to happen after inspection & title report contingencies are over. Look for a financing contingency in your purchase contract. This will allow you to pull out or request an extension on closing if your loan falls through. Unless you're supposed to close next week, you don't need to cancel the sale. If you are supposed to close next week, find out if you can request an extension.
posted by entropyiswinning at 9:35 PM on May 24, 2015

Best answer: My mantra when we were buying our house was, "if this doesn't work out, no one gets paid." It's in everyone else's interest that this works out.
posted by advicepig at 11:39 AM on May 25, 2015 [1 favorite]

This happened to me - the appraiser was dragging her feet. We ended up extending my contract, which seemed standard to the real estate agent and mortgage broker. They weren't bothered, like, at all. I did end up paying a daily fee for the contract extension (which went on for 10 more days due to something else entirely), but that was only a few hundred dollars.

Just call your mortgage contact and ask about extending the contract. I asked if I had to do anything, and he said no - he'd take care of it. Maybe there was another document for me to eSign, but that was it.

Good luck!
posted by jenmakes at 10:08 PM on May 26, 2015