There was a great post in the Globe regarding two issues that may have the potential to derail the mortgage, even if you have clients with good credit and good income.
The first issue that can derail the mortgage is a home that requires substantial repairs. These include broken windows, defective appliances, roof leaks, unfinished renovations, and serious water damage, among others.
The second issue is the appraisal coming back lower than the purchase price. This is happening a bit more frequently now since there have been changes to the Home Valuation Code of Conduct.
The post states that stricter underwriting standards imposed by Fannie Mae, Freddie Mac and FHA have caused a change in mortgage lending.
The post gives us great advice: Have repair issues? TALK to the lender about them before the P&S is signed; likewise, make sure the P&S has a clause that allows for re-opening of negotiations if the appraisal comes in under the purchase price.
http://www.boston.com/realestate/news/blogs/renow/2010/05/two_major_issue.html
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