A mortgage loan approval is never final until the loan has funded. Simply put, that means until you’ve signed the final paperwork and the bank has wired funds to escrow (closing) agent, there are potential mishaps that can potentially derail the entire mortgage approval.
As anyone who has been involved in the mortgage process over the past few years can attest, Mortgages are made up of many moving parts, any of which might “go wrong” while your home loan is underway.
Some are in your control, like deciding to purchase new items using credit-cards during the mortgage process – but many other deal-killers are not. These “not in your control” items are the ones that you may not be thinking of. Just being aware of some potential pitfalls could help save your loan down the road, and your peace of mind today.
What Many Mortgage Articles Don’t Say
Many mortgage related articles offer similar things like buying a car before closing, or opening a bunch of new credit cards, but there are more uncommon factors that can lead to a similar loan turndown.
- For example, a home not be able to get approved if it’s unsuitable, or unsafe, for human habitation — a condition you may not discover until after a thorough home inspection’s been made.
- Broken windows, lack of plumbing, major electrical code violations and/or major foundation damage are all deal-breakers with a lender. You’ll either have to fix the home prior to your loan closing, or don’t close at all.
Best Advice During The Process
The best advice during your loan process is to make certain that you review your mortgage commitment (approval) with your mortgage banker and discuss both the “prior to closing” and the “at closing” conditions that are requirements of the bank for closing and successful funding.
Approved Funding, a mortgage banker with experience and a proven track record of easy closings will know how to guide you during this process.
More Mortgage Pitfalls To Avoid
There are others ways in which a mortgage approval can go bad, too:
- You’re self-employed and your income was declining over the years leading up to your mortgage application
- Your tax return shows large amounts of unreimbursed employee expenses
- You have switched lines ofwork or had unexplained breaks of employment in recent years
Mortgage approvals are delicate and, despite an improving economy, lenders still operate with caution. Talk with your real estate agent and your loan officer and put together a game plan.
The best way to beat the mortgage system is to know the rules before you start to play.
For More Information