Denied For Mortgage After Conditional Approval

Gustan Cho Associates

Denied For Mortgage After Conditional Approval

Can you get denied for mortgage after conditional approval?

When you first contact a mortgage loan originator for a pre-approval, the mortgage loan originator will have you complete a 4 page 1003, which is a mortgage loan application.  The mortgage loan originator will then run your credit and see if you qualify with your credit scores and review your credit history to see if you have had any late payments in the past 12 months, any unsatisfied judgments, review your collection accounts and/or derogatory credit items, see if you had a prior bankruptcy, foreclosure, deed in lieu of foreclosure, short sale and if so, whether you meet the waiting period guidelines.  Your mortgage loan originator will then run your mortgage application through a Automated Underwriting System .  Fannie Mae’s version of the Automated Underwriting System is the Desktop Underwriter DU and Freddie Mac’s version of the Automated Underwriting System is the Loan Prospector LP .  The automated underwriting system will analyze all the information on the mortgage loan application as well as the credit report and credit score and if the mortgage loan applicant qualifies, it will render an approve/eligible per automated findings .  Mortgage lenders like myself have no mortgage lender overlays and will just go off automated findings and as long as the mortgage loan applicant can meet all the conditions from the automated findings, the mortgage loan application will get approved and closed.

A conditional approval is when the mortgage loan underwriter has reviewed all of the mortgage documents including two years tax returns, two years W-2s, recent bank statements, verified borrower’s employment, and has thoroughly reviewed the mortgage application, credit report, and credit scores.  A conditional approval is when a mortgage underwriter feels comfortable in issuing a full mortgage loan approval once all the conditions are met. Mortgage loan borrowers can get denied for mortgage after conditional approval.

What Are Mortgage Conditions On Conditional Approval?

Mortgage conditions on a conditional approval are items that you need to provide for the mortgage underwriter to issue a clear to close.  A clear to close is when the mortgage underwriter certifies that the mortgage lender is ready to close and fund the mortgage loan.  Example of mortgage conditions are updated bank statements, letter of explanations to mortgage underwriters, verification of rent, and other items that has not been submitted by the mortgage processor.  Again, once all conditions have been submitted to the mortgage processor, the mortgage processor will submit final conditions for a clear to close.

More Conditions After Processor Submits For CTC: Avoiding Denied For Mortgage After Conditional Approval

Unfortunately, there are cases where a mortgage underwriter has overlooked some conditions and when a mortgage processor submits final conditions for a clear to close, the mortgage loan underwriter can come back with more added conditions from the mortgage loan borrower.  Whatever conditions the mortgage underwriter gets back with, the conditions needs to be submitted even though they are added conditions and have not been requested before.  Mortgage underwriters can always come back with more conditions and this can get quite frustrating but in order to get a clear to close, everyone is on the hands of the mortgage underwriter because the mortgage loan underwriter has the final say on issuing the clear to close.

Can I Get Denied For Mortgage After Conditional Approval?

Unfortunately, there are cases where a mortgage loan applicant gets denied after a conditional approval has been issued.  Some of the reasons why a conditional approval turns into a mortgage loan denial are when a borrower quits their job, does not have enough funds to close, has a recent late payment, has incurred more debt, cannot provide verification of rent, or cannot meet one or more of the mortgage conditions from the items on the conditional approval.

Can I Re-Apply For Mortgage If Denied?

Over half of my borrowers are mortgage loan applicants who could not qualify from another mortgage lender or has gotten denied at the last minute from another mortgage lender.  I specialize in residential mortgage loans with no lender overlays and am an expert in creative financing and can help mortgage loan applicants who have a hard time qualifying for a mortgage loan elsewhere.  Minimum credit scores to qualify for a 3.5% down payment FHA insured mortgage loan is 580 FICO.  I just follow Fannie Mae and/or Freddie Mac automated findings and have zero overlays on FHA loans, VA loans, USDA loans.  To get an fast pre-approval, click GET PRE-APPROVED NOW or visit me at or call me at 262-716-1965.  I am available 7 days a week, holidays included.

Related> What is a conditional mortgage approval?

Related> Conditional mortgage approval: Road to clear to close

Related> Denial of mortgage

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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