What Is a Financing Delay in NH Real Estate and How Does It Affect Closing?

🏡 What Is a Financing Delay in NH Real Estate and How Does It Affect Closing?

In New Hampshire real estate, most homebuyers rely on a mortgage to complete their purchase. If the lender needs more time to finish underwriting or clear remaining conditions, the transaction may experience a financing delay — one of the most common causes of postponed closings.

Here’s what NH buyers and sellers need to understand.

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What Is a Financing Delay?

A financing delay occurs when the buyer’s lender cannot issue final loan approval or “Clear to Close” (CTC) by the scheduled deadline in the Purchase & Sale Agreement.

Without full approval, the closing cannot proceed.

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Common Causes of Financing Delays in NH

Financing delays can happen for many reasons, including:

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Underwriting Backlog

High loan volume, holidays, or staffing shortages can slow underwriting.

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Missing or Late Buyer Documents

Examples include:

Updated pay stubs

Bank statements

Large deposit explanations

Tax documents

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Appraisal Delays

In certain NH towns (especially rural areas), appraisers may be backed up.

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Appraisal Issues

Low appraisals, needed revisions, or comparable sales disputes.

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Title Problems

Title defects, unresolved liens, or missing releases.

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Insurance or Hazard Coverage Delays

Lenders must verify proper coverage before approving funding.

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Buyer Credit or Employment Changes

New debt, job changes, or credit score drops can trigger new conditions.

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How Financing Delays Affect Buyers

If financing is delayed, buyers may face:

✔ Need for an extension addendum

✔ Risk of missing contract deadlines

✔ Stress around moving or scheduling logistics

✔ Potential risk to earnest money (depending on contingencies)

Extensions must be signed before the financing deadline expires.

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How Financing Delays Affect Sellers

Sellers may experience:

✔ A postponed closing date

✔ Delays in moving or coordinating their next purchase

✔ Risk of the deal collapsing if financing falls apart

✔ Pressure to accept timeline changes

Most sellers will approve reasonable extensions if the buyer is making progress.

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How to Prevent Financing Delays

For Buyers:

✔ Submit documents to your lender ASAP

✔ Avoid opening new credit lines

✔ Keep bank balances stable

✔ Respond quickly to underwriting questions

✔ Lock in homeowners insurance early

For Sellers:

✔ Provide requested property documents quickly

✔ Resolve title issues early

✔ Communicate clearly with your agent and attorney

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What Happens If Financing Can’t Be Finalized?

If the buyer cannot secure financing:

✔ The contract may be terminated

✔ Earnest money is usually refunded if the financing contingency is active

✔ Buyers may switch lenders or loan programs

✔ Sellers may relist the property

Most transactions can still close with proper communication and an extension.

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Bottom Line

A financing delay is one of the most common hurdles in NH real estate, but it can typically be resolved with quick communication and an extension addendum. Understanding the causes helps both buyers and sellers keep the transaction on track and avoid unnecessary stress.

Jim Johnson — Real Estate Agent

58 NH Route 25A

Wentworth, NH 03282

P: (857) 249-7392

W: www.JimJohnsonRealEstateAgent.com

Licensed New Hampshire REALTOR® with Three Hills Real Estate Services

Broker Email: info@ThreeHillsRES.com

Broker Website: www.ThreeHillsRES.com