Married or single? Why is it so important in a real estate transaction? The marital status of a person affects the way he or she can sell property, or purchase property when a lender is involved.
Have you ever experience a closing where the marital status of your client changed between sales contract acceptance and closing, only to discover it at the closing table? Yikes! The closing was likely delayed or in a worse case scenario abruptly came to an end, depending on the circumstances.
When is comes to purchasing property and a lender is involved, it’s not that a client’s specific relationship status determines whether or not they can get a mortgage. However, it does influence what financial factors lenders look at when deciding whether to approve home loans.
If a couple initiates divorce proceedings before closing, this can impact the ability to qualify for a mortgage for both of them. Divorce can potentially hurt their individual credit scores, causing a lender to back out. In the event that both individuals are on the title, both must also agree to the mortgage, whether they are separated or not. There are also complications when it comes to selling property. Jointly held property must be split between the couple, a fact that can delay the sale until each side can agree on how everything will be distributed. Added difficulties can arise if the parties do not cooperate with one another, which is often the case.
Alternatively, if a client gets married without notice before closing, this has potential to impact proceedings as well. If they want to add their spouse to the mortgage, and this spouse has bad credit, they may no longer qualify for the loan. Or, they may have to accept a mortgage with higher monthly payments and a higher interest rate.
It is very important to include the marital status of the purchaser and the seller with your closing package to First United Title Agency. If the marital status of your client changes prior to closing, it is extremely important to notify the title company as quickly as possible to avoid the disruption of closing. Our team has the dedication and resources to help deals close and run smoothly. It is important that your client understand the closing process as a whole. This guide provides buyers with the top ten things they should know about closing.
Founded in 2006, the team at First United Title Agency brings more than 100 years of combined experience in Paola Title Insurance andKansas City Title Insurance, Baldwin Title Insurance, mortgage documentation and closing techniques.