Your Mortgage Approval Isn't Final Until It Is Funded

Reblogger Marilyn Boudreaux
Real Estate Agent with Marilyn Boudreaux, Century 21 Bono Realty 0912122870 LA

Original content by Michael LaFido

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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Larry Bettag
Cherry Creek Mortgage Illinois Residential Mortgage License LMB #0005759 Cherry Creek Mortgage NMLS #: 3001 - Saint Charles, IL
Vice-President of National Production
Let's not forget the fact that Fannie Mae now calls for a credit re pull just before closing!
May 16, 2010 04:21 PM #1
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Dinah Stallworth-Lewis
Priority Real Estate LLC - 318.332.8281 - Natchitoches, LA
NATCHITOCHES, LA HOMES FOR SALE
Marilyln, Great Post!
May 16, 2010 04:49 PM #2
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Don Spera
CR Property Group, LLC - East York, PA
Serving York and Adams County, PA
Marilyn, thanks for sharing this post again. The belts are really tightening after the financial disaster this country has seen. Investors are really scrutinizing all of this information over and over again until they feel they will relinquish their money.
May 16, 2010 08:33 PM #3
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Marilyn Boudreaux

Lake Charles LA Century 21 Realtor
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