Here at MortgageBase, we know how important it is to successfully close on your dream home. You’ve invested time, money, and effort into your search, and you’re finally nearing the end of the tunnel. It’s also true that if you’re attaining a jumbo or super jumbo loan through MortgageBase, it’s likely that your upcoming home purchase is valued at several hundreds of thousands of dollars. That’s a serious investment. We understand how stressful it can be to obtain a mortgage, and how rewarding it can be to close on your new home.
Getting ahold of a mortgage means that a new home is within view. It’s been on the horizon for a while now, and home ownership finally feels solid instead of a looming mirage. The keys to your new castle are almost in your hands! You’re even pre-approved for a mortgage! But then, right at the last minute, there’s a snag. Your lender revokes the mortgage product she has provided. You’re left scrambling to find another mortgage, and now there’s a definite possibility that the house of your dreams will make like a dream and vanish. It’s a nightmare scenario, and it’s a scenario that’s best to avoid. So let’s look into how to avoid losing a pre-approved mortgage! Keep your eyes out for all of the following, they may be grounds for a home loan pre-approval revocation:
Problems Surrounding the Property Itself
A mortgage pre-approval may be revoked due to circumstances surrounding the property that is scheduled to be purchased. A lender may revoke a loan pre-approval if he or she encounters a surprising appraisal value of the property, if the property inspection reveals problems, or if there is an outstanding lien on the property.
Surprising Appraisal Value
If the property appraisal doesn’t reveal a price that’s similar to the agreed closing price, a pre-approved mortgage may be revoked. If the property is appraised at a price that’s much lower than the agreed closing price, the investment may be considered a poor investment, and the mortgage lender may redact the so-called pre-approved loan.
Property Inspection Reveals Problems
Similarly, if a property inspector points out major problems around the property, the pre-approval may be revoked. If, for instance, the roof of the home in question is leaking, it may be a poor investment. A lender may not lend to a borrower looking to invest in a home with major issues, repair needs, and upcoming costs.
A Lien on the Property
If a lien or liens exist on the property, your mortgage lender may reverse pre-approval on a mortgage package. A lien suggests that the property isn’t owned by one party. This complicates the title exchange, and that makes lenders nervous. They may jump ship and revoke their initial pre-approved loan.
Problems Surrounding the Borrower’s Information
These issues are especially important to keep in mind. As a borrower, you may have much more control over these mortgage determinants. Be sure to be cautious as your closing date approaches; avoid making major changes in your finances, employment, and residency to ensure that your pre-approved mortgage remains valid.
A Change of Employment
Lenders may not hold true to a pre-approved mortgage agreement if the borrower changes his or her employment status. If a borrower leaves his or her job, or changes positions, that borrower may be deemed less stable, and that may be grounds to revoke the pre-approved mortgage.
A Drop in Credit Score
Lenders seek out borrowers who have high credit scores because these borrowers are more likely to pay back the value of a loan over its lifetime. If your credit score makes a sudden dip during the closing process, your lender may revoke a pre-approved home loan.
A Change in Income
Similarly, lenders seek out borrowers with a consistent income. If your income drops prior to closing, it may be grounds for a revocation.
A Change in Residency
If you change your address prior to closing, your current financial status may be perceived as unstable. Strive to maintain your residential status prior to closing to ensure that your lender maintains confidence in your living situation and finances.
Problems Surrounding the Mortgage Itself
These issues are relatively rare, but they may be grounds for a pre-approved mortgage revocation. Take note, you may not have any power to control these problems since they depend solely on the mortgage product and the underwriting of that product.
Unstable Interest Rates
If rates are shifting, it may be difficult to issue pre-approval for certain mortgages. Unstable interest rates speak to an unstable economy and home market, and that may be grounds for a mortgage lender to refrain from issuing certain home loan products.
Changes in Mortgage Insurance
If policies or underwriting surrounding mortgage insurance shift, your mortgage lender may revoke their pre-approved loan. Mortgage insurance may or may not be required for certain home loan packages.
Changes in Requirements
If mortgage requirements change within the mortgage agency or within mortgage-backing underwriters, a lender may revoke their loan promise. For example, a lender may revoke a loan approval if the requirements for a FICO credit score have risen.
Here at MortgageBase, it’s our mutual goal to get you into the house of your dreams. We strive to provide excellent loan packages with competitive rates all in a timely manner. We offer premium jumbo and super jumbo mortgages, including interest only mortgages; 30, 20, & 15 year fixed loans; and fixed-term adjustable rate mortgages (ARMs). Please feel free to contact a mortgage lender here at MortgageBase to learn more about the home loan process and our individual mortgage products.