Can someone explain to me how you can get pre approved for a mortgage and then one week before closing/ denied

Answer 1

Sorry you're having trouble.

The pre approval is simply a statement that says "If everything checks out as you say then we will need to review the appraisal and other factors to give you final approval." Based upon a review of the facts that you gave us you're approved.

It's meaningless!!

Please don't give up! Some mortgage co are not good. But I have had great success with www.eloan.com. Just fax over your credit report don't let them pull it again. They can close fast and will give you a good rate. These guys are good if you've got decent credit.

If your credit is sketchy, then use:
www.countrywide.com They will loan just about anyone alive if they have a job.

Ask the seller for a 2 week extension to get your new loan in place. But put a rush on everything so that you don't loose the house.

Did your Realtor recommend that mortgage co? I hope not.

Best of luck

Answer 2

Actually, the correct answer is a combo of the above answers. The difference between prequal and pre-approval is important, but even with a pre-approval, things can happen that stop the loan from closing. The appraisal may come in low. Or the documentation needed might not actually support something that was relied upon. (Like the income you said was $4000/mo. turns out to be $3800.) Plus, once the lender knows the property address, the loan will have to go back through the underwriting system. The risk examined by the system is updated often. So what may have been approvable last week may no longer be okay.

Answer 3

talk with your lender / broker that you were working with. Ask the tough questions of why this happened, let them give you the reasons. If you do not get the answer, than everyone has a boss, go higher up.

Factors that can change your pre-approval. Change in jobs, did you purchase a major item like a auto, etc and have credit pulled again? Is your income lower, was there anything that came up on title. Do you have a judgement that needs paid or a lien? What did the home get appraised at? was it lower?

See if the lender can do a lower loan amount, and see if you can get a stand alone 2nd....Go 80 percent with the first lender.

Did you use a broker, one that underwrited with other companies, so he can still re-submit your loan elsewhere and go off your 1 credit report.

Talk with a broker, a broker underwrites for many company's (I underwrite for 150 companies) so I only have to pull credit 1 time, and they look at my credit. A single lender (not a broker) has programs available, but they may not be able to help you and your situation, so you go elsewhere, and than that person pulls your credit (see what I mean.) FHA/VA approved too. If you shop, your credit is pulled and that is considered a soft pull, for a 30 day period. Just like shopping for a auto, it is good for 30 days. If you apply for a credit card, that is considered a "hard" pull and it drags down your credit score. When looking for a home, please do not apply for a credit card, Department Charge Card, Gasoline Card or make any major purchases, like a auto, etc. This will pull your credit down.

Answer 4

Sadly , it's not that uncommon. They pull a credit report on you when you get pre-approved and they take your word for it with your income and investments. But then you find "the house" and they start evaluating other parts of your credit, like the debt to income and debt to equity ratio. If your credit changes even a little, they might get nervous. They'll also evaluate your sources of funds and that's usually where people get really dinged. If you're not using your own savings for the downpayment, they'll often change their mind about your worthiness. It also happens when you have child support as part of your income because some lenders think a child can change residence at any time and the child support won't be available forever to pay the mortgage.

Usually you can write your way out of it by pulling together docs and writing a letter to the potential lender to explain your side of it. In buying my first home, we went as far as calling the president of the bank and noting that because of their pre-approval and assurances that everything was in order, I had already moved into the home and couldn't imagine moving my child and I out (ours was an issue with child support that made the underwriter nervous). The president of the bank went to bat for us because he realized how many people were going to be disrupted by this and he overrode the underwriter and got us approved. Where there's a will, there's a way.

Answer 5

Actually, everyone above me has it wrong, sorry to say.

There are two terms the banks use. Pre-qualify and Pre-approved.

Prequals, as they are called, simply say you are qualified for a loan, but don't state the interest rates, or the dollar amount they would loan.

On a pre-approved loan, they actually pre-approve your loan at a stated interest rate, term and loan amount. They can deny you the loan, if something all of a sudden comes up on your credit report, if you try to purchase a property greater than what they will loan, or the property you are trying to purchase appraises below the purchase price.

If the bank denies you the loan, you have the right to request in writing the reasons why. If they deny you because of your credit report, they have to tell you exactly what on it disqualified you.

In another question I answered tonight, I explained that banks like to see the debtor not paying more than 40% of their income in monthly dept payments, and that includes your real estate loan.

If you don't meet that requirement, some will lend with payments up to 50% of your income, but charge higher interest rates, as you are a greater risk.

Hope this explanation helps some.

Good Luck

Answer 6

Some pre approvals are full of it. Also they dont fully take into consideration all aspects of your financial history. Now if you got approved at a bank one day and then a week later denied, thats just bad luck and BS

Answer 7

Pre approvals are not worth the paper they are written on. The only paper that counts is the commitment letter. Once you have that your all set unless you loose your job.

Answer 8

someone at the top doesn't like you.