Bridget's Blog

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6 Things That May Kill Your Loan Approval

6 Things That May Kill Your Loan Approval

 

When I am working with a potential buyer, I review ALL documentation prior to providing a loan prequalification letter.  Sometimes, things come up once the buyer finally finds the right home that can stop the loan in its tracks!

 

1.  Overdrafts-this shows the underwriter that you can't manage your money.  Keep transfers and spending to a minimum.  Be sure you have at least one CLEAN account, no large deposits, no transfers over $500 from other accounts,

2.  Unwilling/Unable to provide additional documentation required.  I am not asking for more information because I want to get in your business, I am asking because I have to.  Keep all documentation with regard to large deposits, etc. that may come up.

3.   Making a late payment or increased debt-Sometimes the credit file must be re-pulled prior to closing.  This could be because the credit report is over 60 days old or lender required.  If your debt ratio (monthly out-go versus monthly income) is tight, don't buy ANYTHING on credit that could affect your payments.  Make all payments on time, EVERY TIME.

4.  Creative accounting-I just had to turn down an hourly factory worker for claiming $6000 per year in un-reimbursed job related expenses including uniforms and job search.  This cut the income by $500 per month...and lost the buyer their home.

5.  Losing A Job (fired, laid off, quit)-  If at all possible, don't change job situations in the midst of a loan application.  It may take a while to get another job and a full months pay check, delaying or cancelling your approval.

6.  Documentation that doesn't jive-  Provide all documentation requested. If there is anything funky in your credit/job/asset file be ready to back it up and explain it

Bottom line...stay vigilant after the prequalification has been done, check with your lender before making financial decisions that even have a slight chance of affecting you purchase, be ready and willing to provide a paper trail.  Follow this advice and your mortgage process should be smooth sailing!

 

 

 

Warm Regards,

Bridget McGee  Maryland Mortgage Mama  NMLS# 196068  Corridor Mortgage Group.   410-960-2061 EHO   bmcgee@corridormtg.com or marylandmortgagemama@gmail.com

 

If you are considering purchasing a home in Maryland and want to be sure you are mortgage ready, my brother Tony and I will be happy to help! We help to make the mortgage process a pleasure! 

If you already own your home, we are happy to provide a no-cost mortgage review to help you to determine if refinancing may be in your best interest.  Please contact me at 410-960-2061.

Comment balloon 4 commentsBridget "Mortgage Mama" McGee • May 19 2013 07:58AM

Comments

Such good information. I have a feeling you have had a challenging client who did some or all of the above. Hope your week is a good one!

 

Posted by Margaret Rome, Baltimore Maryland, Sell Your Home With Margaret Rome ( HomeRome Realty 410-530-2400) over 6 years ago

I'm going to print out your list and provide it to any buyer at our first consultation, Bridget! *knocking on wood* I've not had anyone go out and buy a car while under contract but in today's market when buyers are  house-hunting for weeks months, they might just forget.

Posted by Andrea Bedard, M.A.; REALTOR® Silver Spring, MD and beyond (Thompson Company, REALTORS®) over 6 years ago

Yep,

my buyer this month changed jobs 5 days before closing.  We had to wait for him to restart his new job, and then wait 30 days for paystubs and then reapply.

Guess what we did instead?  In this wonderful market, we resold his home in 1 day and it will will have a wonderful family in it in about 3 weeks.

Folks, don't lose your dream home by not listening to your mortgage professional or your Real Estate professional.  We do this for a living and we know how to get you a home. 

Posted by Florida Tolbert Team Keller Williams Advantage, Keller Williams Land Division Specialist (Keller Williams Advantage III Realty in Lake Nona) over 6 years ago

Bridget, this is great information for buyers.  I had a buyer one time that stopped making payments on their car so they could save for their house.  The week of settlement their car was repossessed and then their loan application was denied and they had no car and no home.  Buyers need to understand that they have to be completely transparent when buying and they have to keep everything up to date too.

Posted by June Piper-Brandon, Piecing Dreams One Home at a Time (Long & Foster Hampden) over 6 years ago

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