When you first applied for a VA home loan approval, your loan officer provided you with a list of items you needed to gather and provide to the lender. You went home and retrieved your pay check stubs, your W2 forms and your bank statements, as well as signed, initialed reviewed your fair share of loan disclosures.
Once you found a property, your lender then ordered an appraisal to be performed and contacted the title insurance company to get a preliminary copy of the report. You paid for a home inspector to come and make a visit and the house came out fine. Everything’s going well. Except your closing date looms and it’s getting closer.
Your sales contract is full of information and even though it looks like a lot of simple boilerplate material, which there certainly is that, there are some very important performance issues within. Specifically, the sales price you agree to pay plus the amount of down payment you will provide at the closing. There’s also a date telling all parties when the closing will take place, usually within 30 days of the date of the contract to give everyone time to get their part completed.
Sometimes though, and more often than not, a few bumps in the road appear adding a few more days to the loan approval process. Perhaps the VA lender wanted to see more comps or the underwriter needed clarification on a pay check stub, each adding a couple still to the approval time. And it looks like your loan papers won’t make it to the settlement table on time.
When you see this as a possibility, your agent will contact the listing agent as well as the settlement agent to let them know there’s a possibility of closing later rather than sooner. The earlier this occurs the better. Many contracts contain an extension clause, giving you more time to close but usually this isn’t needed. The seller certainly needs to close and likely have another purchase pending but there’s not much you can do except wait.
An early warning signal is the best approach, especially if it’s not your fault. Typically all it takes is a little bit of friendly communication.