How To Make Sure Your Pre-Approved Mortgage Isn't Cancelled
Posted on: 10 November 2018
The best way to go searching for a home is to be pre-approved for mortgage rates. However, once you have become pre-approved, there's a risk that your approval will be cancelled if the property you are interested in does not meet the standards of the lenders.
Make Sure the Property Type Would Be Accepted
Look at the mortgage program and find out what property types are not accepted. Then, you can avoid these types of properties when you search for a home. For example, if your home has any zoning issues, a lender may not be willing to approve of the loan because if you default on your mortgage, they may struggle to sell your home.
Resolve Health and Safety Problems
If the property has any health or safety problems, these need to be resolved before you can close on the house. For example, if there are any well or septic problems, these need to be corrected so that you can move forward.
Make Sure Other Issues Are Cleared Up
You may have a difficult time going through with the home sale if there are any title issues, property insurance issues, or issues with an HOA. There are some homes in which it is virtually impossible to obtain financing for.
For instance, you cannot obtain financing for a home that is not accessible by roads that are good condition. You cannot obtain financing for a home that is not residential, that cannot be insured against flood damage, or that cannot be used part of the year. If the utilities for the home do not meet community standards, you cannot obtain a mortgage for it.
Your Home Might Be Too Expensive
Depending on how expensive the home is, you might not be able to obtain a loan. For example, you may want to purchase a home in a particular area even if the home is too expensive. However, the lender is only concerned about the value of the home and how much the lender will be able to sell the home for. When your lender is saying that you're paying too much, you should use this to negotiate down a lower price.
The good news is that mortgage lenders prefer not to cancel a pre-approved mortgage loan, so you are more likely to be able to go through with the loan without a hitch. But sometimes, the nature of the loan will lead to your loan being cancelled.
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