The primary reason to obtain pre-approval for a mortgage before shopping for a property is to ensure, you are looking at properties that are within the price range that you can afford.
The primary reason to obtain pre-approval for a mortgage
before shopping for a property is to ensure, you are looking at properties that
are within the price range that you can afford.
Getting pre-approved for a mortgage doesn’t necessarily
guarantee successfully obtaining finance- it is possible a mortgage can get
denied, even after pre-approval.
Here are the top 5 reasons a mortgage application can be
denied:
· Change of employment or a drastic change in
income level
There are certain requirements for the length of consistent
employment and often unexplained gaps in employment history, will require a
written explanation. A change of employment in similar fields is considered
acceptable, unless of course there is a drastic change in the level of income.
There are instances where applications have been denied, based on the fact that
the applicant has completely changed career fields.
· Negatives item on credit
It’s really important to know your credit score before you
apply for pre-approval. If you do get pre-approved, continue to pay your bills
on time and keep monitoring your credit score.
· Incurring additional debts
It’s important that once you have been approved, that you
don’t acquire any additional debts or credit lines. This could have a
detrimental impact on debt to income ratios and can cause an application to be
denied.
· Loan requirements/Lender Guideline changes
It’s possible that a lender or mortgage product may
experiences changes to requirements and guidelines after a pre-approval. Also,
changes to debt to income guidelines and savings required, could lead to a
denial.
· Issues with a bank appraisal
There can be many reasons for issues with a bank appraisal,
ranging from the appraiser citing repairs to ‘under-appraisals”., where the
bank appraiser cannot substantiate that the value of the property is the same
as the agreed sale price.
If you need to speak
to a lending specialist or need an appraisal, contact propertyloans@realrenta.com and we will arrange for a representative
from our trusted finance partner to contact you shortly.
Jason Gwerder
Friday, 15 November 2019
