Buying A Home
Dear Community,
Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Reasons someone would get preapproved then denied a loan?
Is there any other reason other then their credit has changed for the worst?
I have heard of this happening- I was just wondering if there was any other reason.
TIA!
Re: Reasons someone would get preapproved then denied a loan?
Credit change would be the big one (don't go buy a bunch of new furniture for your place on your credit card before you close, and don't do anything that may require your credit to be pulled - new cell phone contract, etc.). Other reasons could be if the appraisal doesn't come back high enough or if the PMI company (if you need it) won't approve the property for whatever reason.
Funding can fall through - a pre approval doesn't guarantee anything. When we bought our first place we put 50% down and DH had a perfect credit score and zero debt and we had a lot of issues over silly stuff - the underwriter wouldn't move forward with our loan because we couldn't show why we had a few $100 deposits. They had been gifts from family to buy furniture but we had to literally have family write letters explaining that the checks were gifts, not loans! This was with Wells Fargo too. so you'd think they'd do enough loans that it would be a smooth process. Seriously. It was a nightmare and it went through in the end but DH and I are cringing at the prospect of dealing with it again now that we are trying to sell and buy a new place.
In addition to those already posted...
Change of employment would hinder or completely stop the process as well. Job loss will kill it, but changing jobs can sometimes be worked around.
Basically, once you put an offer in on a house freeze everything. Make no sudden changes. Don't withdraw or deposit large sums of cash, don't make big purchases (cash or credit), don't do any credit inquiries (car, credit card, any type of loan, etc). Keep your current employment as is (don't quit a second job, don't drop regular OT). Don't pay off loans or credit cards without clearing it with your loan officer first. As soon as the keys are in your hand, you're free to do whatever you want.
http://pandce.proboards.com/index.cgi#general
I think you're talking about pre-qualification. The pre-approval process actually runs your credit.
Yes, we were preapproved. They ran our credit, checked our income and gave us an amount we would be approved up to.
Thanks for the replies!
No, I am not. I know they run your credit pre-approval. They don't however call your employer to verify income and such.
one of our brokers did. maybe because mh just started a new job, but whatever. still happened to us during pre-approval.
to the OP, yes, your loan can still get denied during the process. mostly due to drastic changes in credit like PPs mentioned.
I am a processor, and the main reason I see people get declined is due to income. Especially people who are self employed, and a lot of truck drivers and other commisson based employees who write off a lot of unreimbursed business expenses.
Other factors are running up credit cards during the loan process, falsifying information, quitting jobs.