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Postponing a new loan at borrower's request

Question: 
I have a customer application for a home loan to be used for home improvements. We have run the credit report and approved the application, and she has signed the intent to proceed. We just got back the appraisal. Now, she has says that her contractor may be 5-6 months away from beginning her project and she wants to wait until then to do the loan. Am I able to let this sit that long? How long can we sit on this same application? I've never had something like this happen before.
Answer: 

by Dan Persfull:

That will be a business decision.

We have had this happen a couple of times and we put the loan on hold, however the borrower is informed they have to requalify once they are ready to proceed if it goes longer than 90 days. A lot can happen in 5-6 months. We require an updated construction contract to catch any cost changes and if we deem warranted we will have the appraisal updated.

In short, once they informed us they are ready to proceed we basically treat it as a new loan request if past the 90 days.

Answer: 

by John Burnett:

Another item that the bank might require is an update to the title report.

First published on 01/12/2025

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