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  • J0y
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Is it wise to occupy a home before closing?

Although my loan was approved, I was notified at end of day the day before closing that because of a new regulation I must want 7 days after the loan approval in order to close.  I was scheduled to move in 3 days but closing will not take place for another 6 days now.
  • August 19 2009 - Raleigh
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Answers (13)

See if you can work out a pre-occupancy agreement, like a short term lease, with the seller. If you can't work it out, I would impose on a good friend or negotiate with the place you are currently staying.
  • August 21 2009
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Profile picture for SusanHH
Compromise - if you need to start moving belongings, get an agreement on the garage.  We did that with our buyers.  Risk being very minimal since it's just "stuff" and not huge monetary value in the grand scheme of things.  But can be very helpful to have the few extra days to start the moving process if you had rented a van, lined up friends, etc.  Then just stay in a motel if need be.

Just a thought.
  • August 21 2009
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As a buyer's agent, I would try to get you a short term lease to occupy before closing.

As a seller's agent, I would be unlikely to let this happen, unless you put up a HUGE nonrefundable deposit should the transaction fail.

  • August 21 2009
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Profile picture for J0y
  • J0y
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Thanks everyone for your feedback.  It has been very helpful!
  • August 21 2009
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Thank you Angela. I thought that was not going into effect until this fall. It really doesn't affect most closings and just means you can't fund a loan in 3 days anymore.
  • August 20 2009
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The Mortgage Disclosure Improvement  Act (MDIA) went into effect July 30, 2009. One of it's rules is:

A lender must wait seven business days after providing the early disclosures before consummating the loan. For purposes of this waiting period, a "business day" is defined as all calendar days except Sundays and federal legal holidays as specified. A borrower may waive the waiting period in writing in case of personal financial emergency, such as an imminent foreclosure sale
  • August 20 2009
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I must have missed something. What new regulation?
  • August 20 2009
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I would not ever advise a buyer to move in prior to closing because there are so many things that could go wrong.  The Seller and Buyer first have to come to an agreement of exactly how much to pay for the occupied days and the seller, depending on what state, would have to alter their home owners insurance policy to cover renters.  And then all the "what-ifs" and lines of responsibility comes into play.  Its too much stuff to add to the buying process.  Unless you are going to be locked out of your current residence and you have no friends and family to stay with then I would suggest staying where you are and then moving into your beautiful home on closing date.
  • August 20 2009
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Working as a buyers agent, I would push move in. What could go wrong..she's approved.. (it would look better if your loan funded).
As a sellers agent, I would say absolutely not.  Anything can go wrong. Underwriting can run credit again and she just bought new furniture on credit..there goes the loan.  Absolutely not let us just wait the xtra days to make sure transaction complete, verses trying to spend ??? amount of days fighting to get them out and possible evicting them. What if they cause damages.  **Ultimately as an agent you make recommendations and the decision is up to the Sellers***
  • August 20 2009
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You can move in with a lease between you and the seller for the period leading up to closing - but should you? In my opinion no. There are just too many things that can go wrong. What if the loan ends up not going through? Or delays again? Or some sort of damage occurs to the house? I know it can be a pain to rearrange your move in date, but in the long run a few extra days of waiting are well worth the peace of mind. I wish you a successful close and much happiness in your new home!
  • August 19 2009
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You can do a lease for the period between when you were supposed to move and when you close if the seller is willing. Be aware though, it will get super messy if anything goes awry with your loan. Make sure both sides have insurance covering their asset/behavior during the period.

I did this on my first house and it was by pure dumb luck that it went well.
  • August 19 2009
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Would they even allow you to occupy the property prior to closing?

My biggest concern is whether or not there is insurance on the property during that 'twilight' period where the old owner still owns the property yet the new owner has occupied the property.
  • August 19 2009
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Profile picture for BigMoose81
I am not sure if you will be getting the keys to the home until close, so you probably can't even if you wanted to.
  • August 19 2009
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