Getting A Mortgage Approval
When you are seeking a purchase mortgage loan or a refinance mortgage loan, your loan officer will initally review your full mortgage loan application and credit scores as well as the documents such as two years tax returns, W2’s, recent paycheck stubs, and two months bank statements. He will then analyze it and see which wholesale mortgage lender will do the deal and get a mortgage approval. In most cases, your loan officer will be able to predict whether or not you will be able to get a mortgage approval and will submit your signed mortgage application and loan package for processing and underwriting.
Conditional Loan Approval
Once the underwriting department has reviewed your whole mortgage loan application, you should get a conditional mortgage approval. Getting a mortgage approval does not guarantee you that your loan will get a clear to close, funded, and closed. Staying approved until your loan closes is what is important. Until you mortgage loan closes, the mortgage lender can always revoke the approval in the event if there are changes in your financial and credit profiles.
Mortgage And Closing Delays Can Always Happen
Most mortgage approvals take no more than 48 hours upon being processed and submitted to underwriting. Conditions can take up to a week or more. Most mortgage loan closings can be done within 30 days upon the mortgage loan borrower submitting their signed mortgage application and required documents needed to begin processing. However, closings can be delayed, not because of the buyer, but because the subject property might be a foreclosure, short sale, estate sale, or HUD/FANNIE MAE property. There are cases where closing delays can push 90 or more days. Once a mortgage loan borrower has gotten a mortgage approval, they need to stay approved and no hiccups can happen, otherwise that mortgage approval can be a denial.
Unexpected Circumstances During Mortgage Approval Process
Any unexpected changes in you financial and credit profile or personal life can affect your mortgage approval. A job loss, for example, will probably be cause for a mortgage denial since you no longer have the supporting income. Sickness and medical issues are beyond your control but in the event that you take time off work due to an illness or sickness, this can possibly affect your mortgage approval. Mortgage loan underwriters do not look at personal problems. They are just concerned about facts and numbers.
Things That Can Revoke Your Mortgage Approval
Just because you got a mortgage approval, do not assume everything is okay and you will close on your mortgage loan. There are things you need to avoid during your mortgage approval process and certain things can revoke your conditional mortgage approval.
Do Not Purchase New Vehicle During Mortgage Approval Process
First and foremost, please do not purchase a new vehicle or trade up your vehicle where it will increase your monthly automobile payment. Do not quit your job during the mortgage approval process or take on another better job offer because this will definitely cause a delay on your closing. If you quit your job and take on another job, you need to supply 30 days paycheck stub and need a verification of employment from your new employer in order to close on your loan.
Do Not Change Jobs During Mortgage Approval Process
Changing a W2 job to a commission job will cause a mortgage denial in a heart beat. Do not close out current bank accounts and open new bank accounts or transfer large amounts of money from one account to another account. This will cause a papertrail nightmare for your loan officer, processor, and underwriter and will definitely cause aggravations and delays on your mortgage loan closing. Do not have any late payments. One late payment will drop your credit scores by 80 or more points and will definitely be grounds for a mortgage loan denial. Do not dispute any credit derogatories even though the credit reporting agencies made a mistake. You cannot have a credit dispute during the mortgage approval process.
Do Not Apply New Credit During Mortgage Approval Process
Other causes for mortgage denials include applying for new credit. Do not, under any circumstances, apply for new credit, especially credit cards. Each hard credit inquiry will drop your credit scores by 5 points or more and you will need a letter of explanation for why you are applying for new credit. Many homeowners are so antsy in moving into their new home that they often apply for credit at furniture shops and other retail stores where they offer no interest on credit for up to a year. A large purchase can often times bump the borrower over the required debt to income ratio and will kill the mortgage approval. Do not accept any gift funds unless you have talked to your loan officer and have supplied the proper documentation and gift letters.
Document Irregular And Large Deposits
Do not deposit or withdrawal any amounts of over $200.00 to any of your bank accounts unless it is documented and sourced. Do not co-sign for anyone under any circumstances until you close on your loan. If you are not sure of anything regarding your financial and credit matters, please call your loan officer before you take any action. There are no such things as a common sense thing in the mortgage business.
Gustan Cho NMLS ID # 873293
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