3 Reasons Why Home Loans Usually Get Held Up During Escrow

3 Reasons Why Home Loans Usually Get Held Up During Escrow

3 Reasons Why Home Loans Usually Get Held Up During EscrowReal estate transactions are understandably a long process. There are several parties involved, each one having various people helping them during the process, so it is only natural that process of buying and selling property takes longer than most expect.

Even when both buyer and seller are on-board, have entered escrow, and are looking to complete a quick transaction, there are all kinds of delays that can occur throughout the escrow process. Home loans often get held up during escrow, and it’s one of the more frustrating aspects of the transaction, so it does help to know why these delays are happening to give a clearer understanding of the situation.

Here are 3 reasons why home loans usually get held up during escrow:

Issues with the Appraisal
An appraisal is needed before a loan is secured and escrow is closed, and there are many issues that can arise from this process that hold everything else up. For example, the property may be valued at a lower price than originally thought, leading to new negotiations that are not guaranteed to be successful, especially if the seller was expecting a higher value.

Another common appraisal problem is finding damage to the property. These need to be properly repaired by the seller before the deal can close, and the time this takes often leads to the transaction taking much longer.

Loan Provider Needs Documents
It is easy to assume that once you receive a mortgage commitment from a lender that the loan is secured but this is not the case. Sometimes lenders require documents that you forgot to provide or there are some errors that need to be corrected before the loan is approved, any of which will hold up the process until addressed.

Insurance Issues
All lenders require you to have homeowner’s insurance for the duration of the mortgage, so if any problems occur when trying to get approved for an insurance policy, it will in turn delay the home loan process.

For instance, if the previous owner makes an insurance claim on the property for water damage it will show up on record. This may lead to some insurance providers refusing coverage for the property as it is considered high risk. You may need to shop around for a policy, which can cause delays.
Of course, if a home is not insurable by most companies, it may be worth reconsidering whether it is worth buying at all.

Inland Empire Escrow  provides escrow services for a diverse variety of real estate transactions.  With offices in Chino CA and San Bernardino CA, we quickly and professionally service all the surrounding cities such as Chino Hills, Ontario, Rancho Cucamonga, Upland, Riverside, Redlands, Colton, Grand Terrace, Yucaipa, and more.  To hear more about our escrow services for residential, mobile home, short sale, REO, bulk/business sale, 1031 Exchange, or agricultural escrow, contact us today at (800) 917-9387.