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Yes, they can kill a loan. Ours was denied today. We use an American Express card for almost all of our monthly cash purchases and pay it off monthly. But the underwriter said the rules for American Express cards is that whatever we have a record of paying every month counts against DTI.
Of course, we were pre-approved, have perfect credit, and have owned several houses. The American Express cards and balances were on the original GFE and correct. They only became an issue in underwriting after everyone had already spent so much time and money during the purchase process. And the denial came on the contract end date. Exactly.
So yes, they can dump you after you've invested in the process and after they've made the promise, and with the info that was there when they made the pre-approval.
Mine went through bank underwriteing fine and just last week got sent to usda office.looking like second week of Sept for me. But this has been a long process had to sign a 45 day extension . Good luck all
First it depends on whether you were pre-qualified or pre-approved. Two very different 'birds'. If you were pre-approved, once it gets into underwriting that's when they start verifying all of the information you provided on your loan application. So if there are any discrepencies, that can hold up the process.
I stress to buyers all the time, do NOT purchase anything between applying for a loan and closing using your credit card. They often pull your credit the day of closing to make sure you haven't accumulated any new debt. If you have, they have to re-run your file and re-qualify you all over again. Even if you have applied for a store credit card to save that 15% at time of purchase and paid it right off, doesn't matter - don't do that!
We've actually seen people's loan die at the closing table because they pulled up to closing in a brand new car that they purchased the day before. Of course, that payment sent their ratios over what they could afford per their lender/investor.
Waiting and worrying are the hardest parts of the whole loan process. Knowing that up front will make it easier - and being well prepared with all of your documents. Unfortunately when it gets to underwriting, they can ask for additional paperwork (which everyone wishes they wouldn't, but they do). They have to minimize their risk. Your inspection has zero to do with your loan or underwriting.
I'm sure everything will turn out fine! Most everything can be fixed and worked out - if you have a good loan officer.
Good Luck!
I have been preapproved.the underwriter has my paper work she called me to verify a loan well I reopened a loan before the loan officer pulled my credit it didn't show on my report..the underwriter had to call the loan place to verify everything well a bigger amount popped on me refinancing will that mess me up in the underwriting process even through she confirmed everything.
Short answer, absolutely they can deny you after preapproval.
Just went through this a few days ago, it appears the lenders can deny you on things that should have been uncovered or brought up during preapproval. What's upsetting is that the buyer who have spent money in paying for the home inspection, appraisal, etc is left holding the bag.
I really hope this works out for you, but yeah preapprovals don't mean much. I guess just try to get multiple opinions on anything you think may be an issue and would encourage following up with your LO to make sure certain questionable items won't be an issue.
Thanks. Just hard sitting and waiting...waiting..waiting. I know in the long run a week or so is nothing, but like everything else while you're going through it... it is horrible.
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