5 Things to Avoid Doing That Can Delay Your Mortgage Loan Approval

Buying a home is an exciting time for most people and also one of the largest purchases most people will ever make. Whether it’s your 1st home purchase or your 10th home purchase, there are rules you’ll want to follow when it comes to getting a home mortgage loan to avoid closing delays. At the Sandy Hartmann Group, we want all of our buyers to have smooth closings, without delays or last minute problems, in regards to the loan closing. Keep reading below to check out our handy list of 5 things to avoid that can delay your mortgage loan approval:

1. Shuffling Money Around Your Bank Accounts- This is a common mistake we see buyers make all the time. They find the home they love, have a loan pre-approval, get the appraisal done, and everything is in line for a smooth closing…until the lender finds out the buyer opened a new bank account and moved their closing funds around. Pulling funds from a retirement account or line of credit at the last minute, in an effort to be more strategic with cash reserves is also something that can cause unexpected delays in underwriting. As soon as funds are moved from one account to another, or when the source of the closing funds changes, the lender must re-verify them all over again during the underwriting process. The best practice is to give the lender your bank account info at the beginning of the loan application process and then change nothing before closing. If you want to use funds from another source, have those in place before you apply for a loan and never make changes during the approval process.

2. Change or Loss of Employment- While a loss of employment is often a tragic, unexpected event for buyers, changing employment is another reason loans get delayed or denied last minute. If you’re in the process of buying a home with a mortgage loan, changing jobs can start the under-writing process all over again, delaying your closing. If preventable, never change or leave a job during a home purchase.

3. Making a Big Purchase Before Closing- This is an obvious one that most folks know about, yet we still see buyers make this mistake all too often. Some buyers believe they are such well-qualified borrowers, that a large purchase or new line of credit won’t affect their loan approval or delay the closing. However, whenever a buyer finances something new or depletes a large amount of their cash reserves that were already verified by the lender for closing, delays or even loan denials can happen. Wait until the ink dries on those closing docs on closing day before making any large purchases!

4. Not Providing Documents Quickly to the Lender- Whether it’s tax returns, bank statements, or even small items like a copy of your valid ID, the best practice is to always get those documents to the lender as soon as possible. The longer you wait (even for what seem like small items), the more likely it is your loan will be delayed or have problems during the approval process. Before you even start your home search, you should meet with a reputable lender to find out what documents they’ll need during the underwriting process. Collect everything in advance of shopping for a home.

5. Switching Lenders in the Middle of a Transaction- Never do this if you can avoid it. Find a reputable lender from the start, confirm their fees, their current rates, and find out what you’ll qualify for in advance (see item #4 above). Feel good about the lender you’re using for your home purchase and once you’re under contract on a home, the best practice is to never switch lenders mid-transaction. Most purchase agreements have hard timelines when it comes to the time allowed for appraisals and loan approvals. Switching lenders mid-transaction could put your escrow deposit at risk of being forfeited if the seller isn’t willing to extend the closing date in event of a delay.

For more information on buying a home or best practices to ensure your closing happens on time, give us a call at (727) 398-2310 or message us HERE. We'd love to help you buy your next home in the Tampa Bay area!