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Closing on a Home Mortgage Loan Is a Marathon, Not a Sprint


Applying for a home mortgage is an awkward in-between stage, to say the least.  On the one hand, you are so close to the dream of homeownership that is beyond most people’s reach that you feel like complaining about your financial situation would be in poor taste.  On the other hand, until you walk away from closing with the keys to your new place in your hands, homeownership is anything but a done deal.  Judging by the ads for financial products that appear online and on TV, hardly anyone else is in your shoes.  A cash advance of a few hundred dollars from a shady peer-to-peer lender will not stop your mortgage closing from falling through.  At the other end of the spectrum, you cannot get a home equity line of credit, at least not until you close on your mortgage and spend a few years keeping up with the payments.  The best thing you can do is to get your finances in really good shape before you make an offer on a house, even better shape than your finances need to be in for the mortgage amount you are trying to borrow.  This is much easier than trying to find emergency solutions to unexpected expenses that crop up in the weeks leading up to closing.  If you are doing okay financially but want to protect yourself against the unexpected during the homebuying process, contact a Plantation debt lawyer.

What If the Economy Tanks Between Now and Closing?

If only buying a house were as simple as making a purchase offer and the seller accepting it.  There are multiple inspections, appraisals, and financial twists and turns along the way.  This is true everywhere, but Floridians have it considerably worse than the average American.  In Florida, only 47 percent of mortgage loans that get preapproved eventually close; this is much lower than the national average.

The time from pre-approval to closing is several months.  During that time, interest rates can fluctuate, so, assuming that your employment situation doesn’t change, the fact that you can afford your monthly payment at today’s interest rate does not guarantee that you will be able to afford it at the interest rate that will be available when you close.  If you suffer a reduction in income, the risk of your mortgage deal falling through is even greater.

If a Hurricane Doesn’t Get You, the Termites Will

A major reason for mortgage deals falling apart in Florida is termites.  Some lenders require homebuyers to purchase insurance if the property has termites; this is to protect the lender in the event of the buyer walking out on the termite infested property and the mortgage loan that encumbers it.  For reasons unrelated to termites, homeowners’ insurance is astronomically expensive in Florida, due to its location in the path of so many destructive hurricanes.

Work With a Debt Lawyer About Shaping Up Your Finances in Preparation for Homeownership

A South Florida debt lawyer can help you deal with debts that could prevent you from being able to cover unexpected home buying costs.  Contact Nowack & Olson, PLLC in Plantation, Florida to discuss your case.



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