Is Your Pre-Approval Mortgage Solid? Top Mistakes to Avoid.

Can Pre-Approved Mortgages Fall Through?

01.19.2021 | Articles For Homebuyers

Hey there, future homeowner! So, you’ve got your mortgage pre-approval in hand and you’re feeling on top of the world, right? Hold your horses! As much as a pre-approval is a significant step forward, it’s not your final boarding pass to Homeownershipville. In this article, we’re going to unpack the nuts and bolts of why a mortgage pre-approval isn’t a done deal and how you can dodge the curveballs that might come your way.

Why Isn’t a Mortgage Pre-approval a Guarantee?

Alright, let’s get down to brass tacks. A mortgage pre-approval is like a tentative thumbs-up from your lender, based on a preliminary peek at your finances. It’s like your lender saying, “You look good on paper, but let’s not get married just yet.” Here’s why this initial step doesn’t always lead to a home run:

Income Changes: A Slippery Slope

  • Job Jitters: If you lose your job or switch to a lower-paying one, the lender might get cold feet.
  • Overtime and Bonuses: Counting on that extra cash? A reduction here can cause a frown on your lender’s face.
  • Self-Employment Hiccups: If you’re a freelancer, inconsistent income might make lenders twitchy.

Credit Score Fluctuations: Keep Your Eyes Peeled

  • Big Purchases: Splurged on a shiny new car recently? Your credit score might not be smiling.
  • New Credit Lines: Opening new credit accounts is like walking on thin ice. Tread carefully!
  • Missed Payments: One missed payment might seem small, but it’s a big red flag for lenders.

Debt-to-Income Ratio: The Balancing Act

  • New Loans: Thinking of taking out a personal loan? This might tip the scales in the wrong direction.
  • Maxing Out Cards: Keep those credit cards under control. You don’t want your debt-to-skyrocket.

Property Appraisal: The Value Vortex

  • Low Appraisals: If your dream home appraises for less than expected, your lender might not play ball.

The Unseen Twists in Pre-Approval

You’ve got to keep your eyes on the prize and your feet on the ground. Here are some less obvious pitfalls:

  • Lifestyle Changes: Got a new baby on the way or planning a big wedding? These can impact your financial stability.
  • Interest Rate Hikes: If the market goes haywire and rates skyrocket, your affordability may take a hit.
  • Policy Changes: Lenders can change their policy faster than you can say “mortgage.” Stay in the loop.

FAQs: Clearing the Fog

Q: Can I switch jobs after getting pre-approved?
A: Sure, but tread carefully. Stability is key. A similar or higher-paying job is usually okay, but a career U-turn might be risky.

Q: Should I avoid large purchases during this period?
A: Absolutely! Big-ticket items can wait. Keep your spending in check to maintain your credit score.

Q: How can I ensure my property appraisal goes smoothly?
A: Do your homework. Know the market and choose a property that’s likely to appraise at or above the purchase price.

Keeping Your Pre-Approval Afloat

Alright, you’re armed with knowledge, but how do you keep your pre-approval from capsizing? Here’s the game plan:

  • Stay Financially Steady: Keep your spending and debts in check. Don’t rock the boat.
  • Monitor Your Credit: Like a hawk! Any sudden dips can be trouble.
  • Communicate with Your Lender: They’re your ally. Keep them in the loop about any significant changes.

Final Thoughts: The Art of Staying on Track

So, can pre-approved mortgages fall through? You bet they can! But here’s the kicker: being informed, prepared, and prudent can be your shield against these hiccups. Remember, it’s not just about getting that pre-approval; it’s about crossing the finish line with it intact.

Contact Us for Expert Guidance

Embarking on the home-buying journey? Don’t go it alone. Our team, “The Keith and Françoise Real Estate Team,” is at your service, offering expert guidance every step of the way. Reach out to us, and let’s make sure your path to homeownership is as smooth as possible.

In Conclusion: Your Path to a Successful Home Purchase

Your dream home doesn’t have to remain a dream. With the right approach and a keen eye on these potential pitfalls, you can turn your pre-approval into a successful home purchase. Stay vigilant, stay informed, and above all, stay in touch with your lender. Remember, a pre-approved mortgage is a fantastic start, but it’s your savvy and foresight that will seal the deal. Happy house hunting!