How To Avoid 5 Common Problems in Financing A Lakeland Fl Short Sale
As if the Lakeland Fl short sale process is not difficult enough, getting financing for a Lakeland Fl short sale is equally as challenging.
The type of financing a buyer uses for a Lakeland Fl short sales has a big impact on the transaction for several reasons.
Not all types of financing is applicable for a short sale. If you get the wrong kind of loan, you might not be able to close the Lakeland Fl short sale transaction due to problems with financing, even if the short sale has been approved by the seller’s bank.
Here are the 5 most common problems in Lakeland Fl short sale financing and how to avoid them:
Problem 1: Long waiting time for approval.
It can take anywhere from 4 to 8 weeks for your Lakeland Fl short sale to be approved. During this period, interest rates fluctuate and if you are unlucky, it could increase by the day while you are waiting for the short sale to be approved. Many lenders will not agree to lock a loan beyond 30 days without charging you a fee. Some lenders will not even give you a lock on the loan until the Lakeland Fl short sale is approved. And the bad news is, once the interest rate goes up, you may find that you can no longer afford or are no longer qualified to buy the home.
Solution: Buy a home which is below your means. Don’t max out your pre-approved loan on a Lakeland Fl short sale. Leave some room for adjustments or unforeseen circumstances like the one mentioned above.
Problem 2: Getting a loan which requires an approval period longer than 30 days.
Most short sale banks want to close within 30 days after the Lakeland fl short sale has been approved. If you obtained a loan which requires an approval period longer than 30 days, you might not be able to close within the time required and your approval will expire.
Even with a conventional loan, some delays in your Lakeland Fl short sale are inevitable. It may be the appraisal was not completed on time or the underwriting took longer than usual. Some banks will refuse to issue an extension for their short sale approval letters.
Solution: Ask your lender if they can guarantee a 30-day closing. If you know that the approval letter is coming, then start getting your loan early.
Problem 3: Lenders with loan conditions.
Some lenders have loan conditions. FHA can call for several repairs like fixing paint that is chipped or installing handrails. A VA loan will call for a pest report and a clear pest copletion certificate.
Even with a conventional loan, the appraiser may see the damaged roof and ask for you to replace it before approving the short sale financing.
Banks do not usually pay for repairs. Lakeland Fl short sales are sold in an “as is” condition. The bank will also not allow the seller to pay for repairs, because if the seller has any extra cash to spare, then they will want the money to pay for the difference in the sales price of the home and the mortgage debt the seller owes the bank.
Solution: Ask your Lakeland Fl agent to make a pre-inspection on the Lakeland Fl short sale and discuss potential problems with you way before the short sale process begins.
Problem 4: Buyers asking for closing cost credits from the seller.
Most buyers ask sellers to pay for the closing costs. If the buyer does not have money to cover the closing costs and the bank does not allow the closing cost concession, the buyer might not be qualified to buy the Lakeland Fl short sale.
Solution: Ask the listing agent if the short sale bank will agree to pay closing cost concessions when you write the offer, or you could make your selling price a bit higher to compensate for closing costs.
Problem 5: Having 2 lien holders on the Lakeland Fl short sale
If there are 2 loan servicers on a Lakeland Fl short sale, you need both lenders consent to close. If you have an appraisal or home inspection done before you receive both lenders’ approval, you are taking a big risk. One lender might approve while the other may not.
Solution: Ask for the preliminary title report or title commitment to check how many loans are attached to the property. It’s possible that there is a loan that has been already paid-off that was never reconveyed.
Problems with Lakeland Fl short sale financing are common but can be avoided if you are prepared with this knowledge. Hiring an experienced Lakeland Fl short sale agent will also be a big help once you experience problems with financing.