Buying a home is one of the most significant investments that most people make in their lifetime. When you decide to purchase a house, you may need to secure a mortgage. However, getting a mortgage is not always a guarantee, and it can fall through. In this blog, we will discuss the top four reasons why a mortgage can fall through.
Inaccurate or Incomplete Information
One of the most common reasons why a mortgage can fall through is inaccurate or incomplete information. This can occur when you provide false or misleading information on your mortgage application, such as your income or employment status. Lenders conduct a thorough investigation of your financial history, including your credit score, income, and debt-to-income ratio. If any of this information is found to be incorrect, the lender may deny your mortgage application.
Changes in Employment Status
Another reason why a mortgage can fall through is a change in employment status. When you apply for a mortgage, the lender considers your employment status, including your job history and income stability. If you lose your job or change jobs during the mortgage application process, the lender may reconsider your eligibility for the loan. Lenders typically require a stable income and employment history to ensure that you can make the monthly mortgage payments.
Property Appraisal Issues
Another potential issue that can cause a mortgage to fall through is property appraisal issues. Lenders require an appraisal of the property you plan to buy to ensure that it is worth the amount you are borrowing. If the appraisal comes in lower than the purchase price, the lender may reduce the loan amount or deny your mortgage application. Additionally, if the appraiser finds any significant issues with the property’s condition, such as structural problems or code violations, the lender may deny your loan.
Credit Score Changes
Lastly, changes in your credit score can also cause a mortgage to fall through. When you apply for a mortgage, the lender pulls your credit report to evaluate your creditworthiness. If your credit score drops significantly between the time of application and closing, the lender may deny your mortgage application or require a higher interest rate or down payment. It is essential to maintain a good credit score throughout the mortgage application process.
In conclusion, a mortgage can fall through for several reasons. Inaccurate or incomplete information, changes in employment status, property appraisal issues, and credit score changes are the most common causes. To avoid these issues, it is essential to provide accurate information, maintain a stable income and employment history, ensure the property is appraised correctly, and maintain a good credit score. By doing so, you increase your chances of getting approved for a mortgage and successfully purchasing your dream home.
Total Lending Concepts is a trusted mortgage lender in your community. We offer tailored loan solutions to home buyers of all types. Whether you’re a first-time home buyer or ready to finance your dream home, Total Lending Concepts can help you. Find out more about our loan options!