After looking at what felt like 100 homes you’ve finally found “the one”. The hard work is over now, right? Unfortunately, this is rarely the case, as many of the difficulties of buying a home lie within actually being approved for the mortgage. Even if you’re pre-approved you still have to send the lender a mountain of papers along with proof that you’re financially capable of paying for the home. While you might think you’ll get approval just a few days after this, that’s very rarely the case.
In the majority of situations, the approval process takes longer than most home buyers anticipate. This could lead you to worry that the bank isn’t going to give the approval at all, but the reasons for the delay may not be your fault. Some of the most common reasons why the bank doesn’t approve mortgage applications right away include:
They Don’t Trust Your Mortgage Broker
Not all mortgage brokers have great reputations with lenders and this fact could cause banks to seriously disrupt the buying process. This could be because they lied or omitted some information in the past to help get a client approved or bent the truth when asked questions by the lender. If this is the case, then you are the unlikely client that’s likely to have their application scrutinized by the lender. This isn’t your fault but there’s really no way to avoid it once the paperwork has been sent in by your mortgage broker.
Looking to avoid this situation? Research different mortgage brokers in order to find one that is trustworthy and has a great reputation. It’s worth the time to ensure you have a smooth application process and to avoid being let down by the bank when searching for a home.
They Don’t Know When Your Deadline is
Whether you’re on a tight deadline or have a couple of weeks to wait, it’s important to make sure your deadline for approval is clearly listed on your application. If it’s not, then your paperwork is likely to get pushed to the back of the line where it could take much longer than anticipated to receive an approval.
In order to avoid this situation, make sure you list your deadline clearly on your paperwork and submit it with ample time for approval. If you’re looking to do a quick close, then remember that even with the deadline listed you might not get a response right away. In situations like these, make sure the seller has agreed to wait a few more days for the lender to come back with an answer.
The Paperwork Was Submitted Late
Are you sure your paperwork was submitted the day you gave it to your mortgage broker? If they waited a few days to get the information in, this could be the reason for the delay. This is another reason why it’s so important to research different mortgage brokers before you hire one. Someone who values you as a client will submit your paperwork as soon as possible to get the ball rolling.
They Don’t Feel Pressure
Have you made it clear to the lender that the deadline is set in stone? If they don't understand the importance of your final approval date, you could end up waiting much longer to get a response.
Your Application Wasn’t a Priority
Some mortgage brokers who send mass applications to a certain lender often take priority over those that are sent by smaller brokers. What does this mean for you? Well, rather than your application being sent straight to a preferred underwriter, it will likely get sent to a head office where it’s distributed among incredibly busy underwriters. Unfortunately, once it’s there, your mortgage broker won’t have any contact with the underwriter to find out when you’ll get a response.
By working with a mortgage broker who sends a lot of applications to one bank, in particular, you may be able to avoid this. However, it’s not guaranteed. In general, the best you can do is research your mortgage broker to make sure they’ll provide you with great service even when there are delays.