Our house sale in SoCal last fall almost went under, apparently because of some last minute buyer financing problems. Closing was delayed a week while they straightened things out, somehow.

I remember when we first started looking to buy a house several years ago, our agent advised us to not make any major purchases until after the closing. She'd had a sale fall through because the buyers went out and put on credit a whole bunch of furniture a week before they closed on the house. And that made the lender nervous and was a deal breaker.

I think sometimes the buyers are lying to the lenders, too. They conveniently forget about those other credit card bils, or the car payment is larger than what they said, or oops, what about those child support payments?

i know exactly how frustrating this is for you i am working on the 4th contract for my house right now and i am praying i don't have to deal with a 5th.

I've seen a couple of situations where big purchases made after acceptance but before closing have killed the deal. The buyers thought they could buy a new car or a spa for the new house because their loan was already approved, apparently not realizing that the lender would do a second credit check before closing.

I hope the next one works for you!

The first buyer on the house we just sold backed out after the inspection. She was a first-time buyer and, as our agent put it, the inspection "scared her to death." We had a leaky driveway issue (which we had disclosed before the inspection), and she was told fixing it would cost about $3k. The inspection turned up some "minor" electrical issues (we don't know what), a rusty vent on the water heater (which we replaced), and cracks in the basement wall, which the buyer should have noticed when she looked at the house. She was approved for financing, so that was never a problem. She tied up our house for a month+. We were not happy with her...and wished her good luck finding a "perfect" house for the money she was offering.

Margaret, are you using an agent? Usually your agent follows that issue closely. The buyer should have a short time to loan approval.
Finally, next time, get fast approval and a short closing. Work with your agent to get this.
I'm sorry this happened to you.

Yes, we have an agent who has been great. The closing was supposed to be just one month after the offer, but we have given two extensions; (the first extension helped us also).

I haven't seen any mortgage paperwork but my agent was being told it was moving along. Our buyer was taking money out of her current house for the down and financing the rest, so there were two loans for her to get.

Can a mortgage loan be obtained in less than a month? She got the appraisal done within the first week, so she wasn't goofing around.

Margaret

In light of the recent mortgage issues, lending has tightened considerably.....and although the new regs don't take effect until September, IMO, many lenders are being pro-active which could be why those who may have qualified for the very same amount a few months ago could have a problem qualifying for the same amount now.

Those buyers who can, should move now....or else face an even more difficult lending climate come fall.

Here is a link that might be useful: Fannie Mae, Freddie Mac Tighten Mortgage Borrowing

Yes, a mortgage can be obtained (and closed) in less than a month.

But please note this - the lender will wait until just before closing to perform the final mortgage approval as well as some important paperwork. So what you need to do is have closing moved up, then the mortgage/paperwork will occur sooner as well.

"Those buyers who can, should move now....or else face an even more difficult lending climate come fall."

Yeah, that's why we're jumping the gun a little bit, every mortgage person we talked to IRL said the exact same thing. I don't know HOW he pulled it off but DH managed to get the financing to go ahead and buy another house before we sold this one without a bridge loan - just a straight second mortgage. (And from a real bank, too, not one of these slightly hinky internet places.) I think it may have been the combination of our very high credit rating (yay me LOL) and the fact that we've had two offers already, although both had fallen through. We're taking a loan against the 401k for the down and when this house is sold we'll use the proceeds to pay the 401k back. There's enough in savings to pay the mortgage on this house past Christmas while we pay the new mortgage out of everyday funds, but I don't think it'll take that long to unload this place which is good because I don't really want to use up our savings on this place! Besides, a lot of people prefer to look at empty houses, and we can put a lockbox up for their convenience. We'd be moving about 45 minutes away but I have a friend in town that I can probably get to come check on the house every couple of days. It's a big risk but we talked about it and think it would actually reduce my stress level rather than increase it.

When we bought this house it was 19 days from offer to close; we had gotten preapproved but it took about 10 days to get the financing fully in place. Our realtor took care of scheduling all the inspections and everything, and she really lit a fire under people's butts. :-) We have a bid in on a bank owned property (pretty much everything we could afford was bank owned!) now and we'll have to move fast on everything if we get it - inspections, appraisal, getting the mortgage squared away - because that bank charges $100 a day for delays after 30 days from offer acceptance. Bleccch.

Margaret, unfortunately, I am a buyer who was deceived like this. I was constantly assured throughout the process by my mortgage broker that "since the computer (electronic underwriting) qualified you, there won't be a problem." Imagine my shock when she called me two days before my closing asking questions about a financial issue that I was upfront about and that was on the credit report she reviewed prior to issuing a pre-approval letter to me. I was told that the underwriter was asking about the issue so that's why she was gathering more information. Needless to say, I did not get approved for the loan and lost the house. I had not gone on any spending sprees or changed my credit profile in any way between the initial review and the date of denial.

It turns out that the "approval" the broker received had a condition on it that was never communicated to me or to my realtor. If I had known about the condition, I never would have made an offer on a house and inconvenienced the seller or myself. I now believe mortgage brokers will say anything to a buyer because, at the end of the day, there is no penalty for them. I, on the other hand, am out the appraisal and inspection fees, neither realtor will be compensated for their work, and the seller's home has been off the market for 2 months.

Please know that as disappointed as you are, the buyers are feeling the same thing (or worse). I wish you good luck in selling your home and with the next buyers.