It may seem like a good idea to get a head start on packing or give your landlord notice before you get a clear to close, but there are many reasons why this is a bad idea. To make the mortgage and moving process as comfortable as possible, do not give your landlord notice or pack a box prior to receiving the clear to close.
You Will Not Need to Make Two Payments at Once
The mortgage process is set up so that you will never have to make two payments at once. At the mortgage closing, a closing cost called per diem interest is paid. This fee covers the interest from the closing date through the end of the month. Then, the first mortgage payment is not due until the following month. As an example; if you were to close on September 10th, the first mortgage payment would not be due until November 1. If you receive a clear to close notice on September 1st and give your landlord notice on the same date. You would have to make your last rent payment on October 1st and your first mortgage payment would be due on October 1st. You will not need to make two payments at once.
Closings Can be Delayed
The Bank will do everything in its power to achieve a timely closing but the bank cannot control third parties or outside influence. In some cases title may be delayed or the property may require repairs that delay the process. If you have given notice or started packing, it is possible you will be required to move out before the loan closes. This can be extremely inconvenient to find temporary housing until you close.
The home purchase and mortgage process is stressful enough, if you pack boxes prior to closing it only adds to the stress level. With an unknown closing date, digging through boxes to find that clothing iron can be extremely stressful and add to an already stressful process.
By packing early or giving early notice to your landlord, you essentially limit the amount of time you have to move out of your current home. If you wait until you receive a clear to close, you give yourself time to move after closing. Trying to move an entire hours & family in one day can be very difficult and stressful.
Mortgages Are Complex
Mortgage are an extremely complex process that require many parties working together to achieve closing. Part of working with a professional mortgage company is getting the right advice. There is never a way to skip a housing payment, whether that be rent or a mortgage. If you have a roof over your head, it is going to require some kind of monthly payment. Until the loan is clear to close…….. it isn’t. It will require patience but taking steps to move prior to receiving a clear to close will only complicate the process. To have the most comfortable mortgage process possible, avoid making changes to your life until a clear to close is received. If you have any questions about this or anything mortgage related, give us a call any time at (518) 324-5544