Even if you are already approved by your bank or mortgage broker, you may unknowingly derail your mortgage financing.
Here are four things that can go wrong. If you can avoid these kinds of problems, you are likely to get the “final approval” green light from the mortgage lender.
You do not have enough documentation.
Mortgage lenders request a variety of financial documents when approving borrowers for a mortgage. You can reduce the likelihood of document-related problems by enclosing your documents in advance.
As your mortgage broker I will try to handle the documents that the mortgage lender is going to request with you to collect them before the mortgage lender finds your dream home.
You do not have enough funds for your closing expenses.
All mortgage lenders and mortgage insurers must have additional “cash balances” in the bank before borrowers can bear the closing costs.
Borrowers may refuse a mortgage after obtaining prior approval if they are unable to provide documentation confirming that these funds are available.
The general rule is that you must be able to prove that you have a 1.5% purchase price available to cover more expenses than your down payment funds.
You have made a large permit, or purchases, and taken out additional debt since obtaining prior approval.
Being approved in advance for a mortgage or being approved if you are at that stage does not mean that you can go out and make big purchases.
-Live-income ratios are very important in the mortgage process. This ratio is basically a comparison between the money you earn and the amount you spend to pay off your monthly debts.
Having more debt can damage your chances of getting a mortgage financing.
To avoid these types of problems after obtaining prior approval, avoid making large purchases or opening new credit routes. Keep those credit cards in your wallet until you get final approval and until you move into your new home.
Your income or employment situation has changed.
As your mortgage broker, I will allow you in advance based on your current income and employment situation. However, if your position changes for a while during the surety process, you may be denied a mortgage.
Once you find a home and move in, do everything in your power to keep your income and employment status stable.
Since we are in the midst of an epidemic many lenders will re-verify your current employment status before financing your mortgage.
Here is what you need to take from:
- Prior approval is helpful in the mortgage process. This will allow you to reduce your search for homes that fit your budget and earn interest rates. But this is not a guarantee of financing.
- Prior approval is not a mortgage commitment. Most lenders will not review your application until the property has been found and you will have an accepted offer.
As your mortgage broker, I can assure you that the lender will give you a mortgage for a certain amount, your financial situation will not change before closing and the lender will also like the property you are buying.
- Even having a prior permission letter does not mean that you are home free. Things can go wrong before the final deadline that causes the mortgage to be rejected.
My role as your mortgage broker is to minimize any likelihood of anything happening to you during the mortgage process and I will try to make this process run as smoothly as possible.
I seem to be asking a lot of questions and requesting a lot of paperwork, but you need to make sure you are in the very best position to start your home hunt with confidence.
Mortgage pre-approval is the first step to home ownership. If you want to start your journey to home ownership please visit Here To get started or call me at 1-888-561-2679