In general, you are correct. However, you’d be surprised to find out that is not always the case. Here are the top three reasons loans get denied after being pre-approved.

#1 - Change or Quit your Job

Believe it or not, lenders want to know you can pay them back! Even if you have an excellent employment history, changing or quitting your job during the loan process is the easiest way to go from being pre-approved to denied. If you are thinking of changing positions or leaving your current one, please communicate that with your loan originator. That way we have time to react and can put a game plan in place to move forward. 

#2 - Apply for new credit

Applying for new credit or charging credit is another easy way to change your approval status. We know you want to get new furniture for your new home and there is a great Memorial Day weekend sale! However, this now changes your debt to income ratio, which is a major factor in lending. You now may have too much debt to qualify for the payment. 

This also includes having your credit pulled multiple times. This can ding your score 2-5 points per hard inquiry, which is a quick way to tank your credit score. Multiple credit inquiries can absolutely have detrimental effects on your approval. 

#3 - Move money

Large money transfers into and out of accounts is a big red flag. Lenders want to know why the money was transferred, where it came from, where it went to, and will request all the necessary documentation. If we cannot prove where the funds came from, they will be backed out of the transaction entirely. It’s all Patriot act, anti-money laundering, anti-terrorism driven. So, if your loan is in process and a loved one wants to gift you some money, talk to your loan originator before moving the funds.

That’s what we do at Chissell Mortgage Group, we make sure your loan is approved. Call us today, (727) 376-6900, and learn more about what options are available to you!