Well, it depends on what you mean by 'mentally incompetent', since there are many definitions and interpretations. And in the case of someone buying a home, or someone refinancing their mortgage, that interpretation just might come from someone whom you would least expect:
One of the responsibilities of a notary, in addition to identifying the person signing a document that needs to be notarized, is to establish whether that person is 'mentally competent' to sign the document.
For example, a sibling may want their mother who is in a nursing home to sign a Power of Attorney. The mother is totally unaware of what the papers mean, and what this Power of Attorney allows her daughter to do. Nevertheless, she is urged by her daughter to 'just sign the papers'.
It's not that simple.
A careful notary will not allow the mother to sign the Power of Attorney. The daugher may have the best intentions, and only want what is best for her mother. But if the notary feels that the mother is unaware of what she's signing, that notary may refuse to notarize the signature of the mother on that Power of Attorney. This is for the mother's protection. And it's for the notary's protection as well, since the notary can be sued, lose their notary commission, and possibly even go to prison.
So a notary must establish that a person is 'mentally competent' to sign a document that requires notarization.
This also applies to someone who has been drinking.
If the notary feels that the signer is mentally impaired or 'mentally incompetent', the notary can refuse to notarize their signature. Once again, this is for the signer's protection.
One of the obstacles to buying a home is that there will be some closing documents that need to be notarized. The buyers may be happy and want to celebrate the purchase of their new home.
Just caution them to save the alcohol for after the closing.