Joe SamsonI have live in Calgary, AB since 1991. I love traveling and big game fishing. Licensed REALTOR &

Associate Broker in Alberta | www.JoeSamson.com | www.GreatCalgaryRealEstate.com

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Things That Could Go Wrong WithMortgage Approvals

Whether you’re buying or selling a home, a mortgage approval is something you’ll likely have to deal with.If you’re the buyer specifically, this might seem as simple as submitting some paperwork with yoursignature. Unfortunately this is very rarely the case, as there are a number of things that can go wrongand hold up the approval. While there are some things you can do to avoid this, such as making sure youhave all your paperwork filled out complete, other times the problems can be out of your control.

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However, by learning more about buying a home, you will be better prepared for handling thisprocess in the future. Even if you’re the seller it helps to understand more about these types ofissues, as you’ll see that the buyer isn’t always the one at fault. Some situations that arecommonly seen (and frustrating for everyone involved) are listed below. Whether you’re just aboutto start this process or are only beginning to look at real estate, it’ll be helpful to know what cango wrong with mortgage approvals.

The Mortgage Broker Isn’t Up to Par

Almost everyone has heard nightmare stories of mortgage brokers who just don’t do their jobquickly or efficiently. This is one of the reasons why it’s always recommend to do as muchresearch as possible to find a really good mortgage broker. If you don’t, this could be somethingyou end up regretting when your deal is hanging by a thread.

The Lender Doesn’t Trust the Mortgage Broker

Mortgage brokers play an important role with the approval process, as they collect documentsand submit them to the lender so that they have all the information they need to approve or denythe paperwork. Unfortunately not all brokers are trustworthy or honest, which is why they mayhave bad relationships with certain lenders. Ultimately this could lead to the lender paying extraclose attention to any paperwork submitted by that mortgage broker, which further holds up theprocess.

The Lender Prioritizes Applications

Reality today is that lenders may give preferential treatment to mortgage brokers who send a lot ofbusiness their way. Unfortunately if you’re working with a broker who only sends a small amountof applications to them, this could mean getting pushed to the back of the line. At this point it’s upto the lender to go through the approval process, and the mortgage broker really won’t have a sayin how quickly everything is completed.

The Lender Isn’t Taking the Deadline Seriously

Letting the lender (and mortgage broker) know that there is a strict deadline is important. Oftentimes the underwriters who work for lenders base their daily workload on the deadlines listed onpaperwork, which means if yours is not for a couple of weeks, you shouldn’t expect an answerearly. Of course putting emphasis on your deadline doesn’t guarantee that things will work outperfectly, but it can help show that you’re serious about buying on time.

The Seller Doesn’t Agree to Extending the Deadline

Unfortunately no matter how hard you try to make sure your mortgage is approved on time, it’snever something that’s guaranteed (you can read more about reasons why this happenshere: http://www.greatcalgaryrealestate.com/blog/how-not-to-screw-up-your-mortgage-approval.html ). 

There are many reasons why it could get held up and cause you to have to turn to the buyer to askfor a few more days. While some buyers are willing to extend this, not all of them will. This is whyit’s recommended to have a great local Realtor speak with the seller about extending the financingcondition date when the buying process first begins. That way if something does happen, they’llalready have agreed to waiting a few more days past the deadline for the lender to finalizeapproval.

Buying a home (and selling one) can be quite a bit of work, especially when the lender is draggingtheir feet but with proper planning and understanding how to deal with a lender will lead to greatresults.. This is why it’s better to be prepared for potential approval problems that can arise, suchas those listed above.

Aug 9th, 2016

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