South Orange County Blog from Bob Phillips

These Overlooked Issues Can Become Deal-Killers For Your Mortgage Application

These Overlooked Issues Can Become Deal-Killers For Your Mortgage Application

A mortgage loan approval is never final until it’s funded. And that means after you’ve signed the final paperwork and the bank has wired funds to escrow.

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 on credit during the mortgage process, many more 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.

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 of work 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.

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