Your Mortgage Approval Isn't Final Until It Is Funded

By
Real Estate Agent with CONLON/Christie's International Real Estate

Your Mortgage Approval Isn't Final Until It's Funded

 

Approval not final until fundedA mortgage approval is never final until it's funded.

A host of things can "go wrong" while your home loan is underway. Some are in your control, many more are not.  And just being aware of some potential pitfalls could help save your loan down the road, and your peace of mind today.

MSN Money ran a summary piece on the topic titled "10 Things That Can Kill A Home Loan".

It's an excellent article because, unlike most "get approved" articles that advise against things like buying a car before closing, or opening a bunch of new credit cards, the MSN Money piece addresses more uncommon factors that can lead to a similar loan turndown.

For example, a home may be unfundable if it's unsuitable for human habitation -- a condition you may not discover until after a thorough home inspection's been made. Broken windows, lack of plumbing, and/or major foundation damage are all deal-breakers with a lender. 

Either fix the home prior to closing, or don't close at all.

Homes in "declining markets" have danger spots, too. Especially for conforming mortgage applicants with less than 20% equity.

Because of how private mortgage insurers operate, some homes carry tougher, ZIP code-based PMI eligibility requirements. As a mortgage applicant, it's important to understand this because you may be PMI-eligible in one neighborhood, but not in another.

There's others ways in which a mortgage approval can go bad, too:

  • You're self-employed and your income was lower last year versus the year prior
  • Your tax return shows large amounts of unreimbursed employee expenses
  • You failed to return required paperwork to the lender within a reasonable time frame

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.

 

Posted by Michael LaFido on May 14, 2010 | Tags: MSN Money


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  1. Marilyn Boudreaux 05/16/2010 04:19 PM
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Rainmaker
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Paula Smith
RealtyPath St. George - Saint George, UT
Paula Smith Associate Broker RealtyPath St George

very true!  When I bring an offer to a seller I tell them the offer is only the first step, does not mean much until the loan funds!!

May 14, 2010 02:28 AM #1
Rainmaker
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J Perrin Cornell
Coldwell Banker Cascade Real Estate - Wenatchee, WA
Broker, ABR, VAMRES

so why is this post identical to one by Tommy Xintaris also on ar???

May 14, 2010 03:25 AM #2
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Rainer
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Michael LaFido

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