Reasons a person cannot close on house.?

Question

I was approved for a loan by a mortgage broker. The closing date is set for September 14th.

My info is in an underwriters hands, and I hear it can be tough to get their approval. Does anyone know the reasons why someone would not close on a house?

How often does it happen a person cannot close on their house?

Answer 1

it all depends on the banks requirements, but it is common and if it does happen then you simply go to another lender. Some reasons could be a flag on your credit report, prior credit counseling or public debt. Other reasons could have to do with the home itself. Usually when the financing has gone to underwriting most lose ends are already taken care of by the broker.

Answer 2

Okay hears the deal. You were actually pre-approved for a home loan through a lender the broker chose. The actual "approval" comes once the underwriter reviews all documentation (income, appraisal, title, etc). Now, if everything checks out based on your initial application, you should be fine. For whatever reason if you do not get the final approval, ask for a detailed explanation.

Reasons some people don't get the final approval: they lied about income on the initial application, there are items wrong with the property (in the case you probably wouldn't get a denial, just stipulations that the items be fixed), etc.

And an important piece of advice - don't use a broker. You can shop around yourself and avoid paying a broker fee.

Answer 3

It's not that common, so relax, deep breaths.

If you are going for a government loan (FHA, VA., etc.) it can be tougher as far as the house goes, but the mortgage lender should have dotted the I's and crossed the T's.

Reasons a mortgage fails in underwriting:

Contingencies in the purchase contract not resolved.
Failure to document that repairs noted on the home inspection were rectified.
House didn't appraise for loan amount.
Too high debt to income ratio.
Doing something crazy: buying a new car, quitting a job or making large CC purchases.
Some form or signature not received.

There are so many reasons a mortgage fails in underwriting, but even if it does, you may be able to salvage the transaction.

Answer 4

There are several reasons why a customer can be denied once the file is sent to underwriting. First of all, the loan officer can make a mistake during pre-approval which can later be caught in underwriting. Also, underwriters may calculate income differently than a loan officer could forsee. Lastly, there are times when it is required for your credit to be re-pulled when your file goes to underwriting. If, for whatever reason, your credit score drops, you may no longer qualify for the loan. These things definitely don't happen all of the time, but they do happen. The good news is, you still have plenty of time before your closing. If something does happen in underwriting, there's always time to look for another lender.

Answer 5

Well you have a ways to go before you should start to worry. The underwriters look at your whole financial picture, they look at the appraisal and if all is in line, then they process the loan package and you close. What are some reasons why you wouldn't, the mortgage company didn't get the package to the closing company in time, the appraisal came in too low, a natural disaster or act of God. Just kidding, you are worrying for nothing. It will all be fine.

Answer 6

Since you were ALREADY APPROVED FOR THE LOAN, you can't have too much debt--they wouldn't have approved the loan otherwise.... SO, other reasons would be----

1. Something big doesn't pass inspection--like a roof or the electrical system or the basement or the Structure could be defective and not pass...
2. the Seller could back out maybe.
3. Death of the seller prior to the closing date-

Answer 7

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Answer 8

Mortgage Brokers get a certain percentage if your deal goes through.Finance company's have a different motive they are more concerned if you will.Actually,be able to pay back with interest so everybody wins.You get the home you wanted,Mortgage Broker gets a percentage for finding a client.
And the finance company makes money for giving you the loan.

Answer 9

The underwriters won't close on a loan when they want a house repaired such as a leak that happens to a basement. They want the sellers to repair it or give some funds toward it or they will not close.

Answer 10

Credit
Appraisel value less than selling price
Failed inspection
A stipulated interest rate on contract not obtained or not available.

Today's morgtage woes may have some effect. Subprime morgtage co. is not carrying any new loans at the moment. Too many repos, 5% ,and slow pay14%. Outstanding loans 1.2 trillion $.