Top 5 Reasons Your Mortgage May Fall Apart

It is a lot of work to get a mortgage and there are many people involved, from broker, lender, appraiser, and lawyer. It is rare to see a mortgage fall apart but sometimes it happen. Here is a list of the most common reasons I have seen or have heard about as to why a mortgage does not get done.

1. Documentation does not match your story - If you say that you earn $60,000 of income, your income documentation needs to match. You can't give documentation that shows $58,500 of income when you need $60,000 of income to qualify. The language of lenders is documentation.
    
2. You do not satisfy all of the lender's conditions - The lender issues a commitment letter that shows the mortgage terms and all of the conditions that need to be satisfied. You cannot choose to ignore a condition. You must provide documentation to the satisfaction of the lender for each condition. If you do not satisfy a condition, then you do not get the mortgage.
    
3. Appraisal Report - The appraisal report must support the value of the property. In a purchase, the lender accepts the lower of the purchase price or the appraisal report. If the appraised value is less than the purchase price then you will need to add more of a down payment. Also, if the appraiser notes any property deficiencies, this could cause the lender to pull the mortgage.
    
4. At the lawyer's office - The mortgage commitment has lawyer conditions that must be satisfied as well. Typically, you do not see the lawyer until a few days before closing. Any documents that you cannot provide will cause delays in funding the mortgage until you can provide the satisfactory documentation.
    
5. Fraud detection - Lenders are under close scrutiny on detecting fraud. Make sure that you are not misrepresenting anything about your file. At some point, the lender will detect it and your mortgage will be instantly cancelled.

You do not want to be in the rare situation of not getting the mortgage because of one of these reasons. It is always best to get pre-approved with full documentation up front. Also, when you do get a lender commitment letter, send it to your lawyer to ensure that they do not see any issues.

Contact Us
For more information on ensuring that your mortgage will not fall apart, contact your local Ajax Mortgage Broker, Sean Stewart at 905-427-9596 or sean@seanastewart.com