Your Mortgage Loan Approval Isn’t Final Until It’s Funded

Approval not final until fundedA mortgage loan approval in California’s Inland Empire region (Temecula, Murrieta, Menifee, Canyon Lake, Corona, Chino, Riverside, San Bernardino, Ontario, Norco, Ranch Cucamonga, and many others)  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 are not.  And just being aware of some potential pitfalls could help save your loan down the road, and your peace of mind today.  That’s the value of working with an experienced licensed Mortgage Professional….to reduce the risk of the loan approval form blowing up in your face at the 11th hour.

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 turn down.

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 that your Loan Officer and you 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 2106 unreimbursed employee expenses
  • You failed to return required paperwork to the lender within a reasonable time frame
  • Your Loan Officer doesn’t know the lenders additional specific overlay guidelines
  • You have unresolved ‘disputes’ with creditors on your credit report.

Mortgage approvals are delicate and, despite an improving economy, lenders still operate with caution because they can’t afford to get stuck servicing a loan that won’t be insured by the government. 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.  You nee to be 100% sure your Loan Officer knows what he/she is doing and is very experienced.

If you would like to inquire about your ability to qualify, want a second opinion, or just want to find out if there are any obstacles to achieving a stress free loan approval, please call (951) 215-6119.

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