Factors That Can Delay Your Mortgage Approval


Getting pre-approved is one of the first steps you’ll take when buying a house. This involves providing your lender with income information and giving the bank authorization to check your credit. Based on your income, credit history and assets, the bank can pre-approve your mortgage and determine how much you can spend on a property.

But although pre-approvals prove you’re a serious buyer and qualified, these approvals are conditional and don’t guarantee a mortgage. A mortgage isn’t technically “approved” until the end of the underwriting process which can take 30 to 45 days. And unfortunately, numerous situations can delay a final mortgage approval.

  1. Paperwork delay

During the initial process, you’ll provide the lender with several pieces of documentation to help the underwriter assess whether you’re eligible for the loan. This includes paycheck stubs, most recent tax returns, bank statements and other paperwork to give the bank a clear picture of your financial standing.

At some point before closing, the bank may ask for additional paperwork. This is customary. This can include updated bank statements to verify assets, or an updated paycheck stub or profit-and-loss statement to make sure your income hasn’t changed. The sooner you provide your lender with this information, the sooner the underwriter can finish processing your loan. Any delays on your part can affect your mortgage approval.

  1. New credit inquiries

A few days before closing, your lender will check your credit again. During the underwriting process, you shouldn’t apply for new credit or significantly increase your credit card balances. If your mortgage lender checks your credit and sees new inquiries, this can raise questions and delay a final approval. The lender will have to investigate to check for new accounts opened since getting pre-approved. Opening a new credit account can affect your mortgage approval because new debt reduces borrowing capacity.

  1. Appraisal issues

Although an appraisal issue is beyond your control, it can delay a final mortgage approval. This is because banks will not lend more than a property’s value. If you purchase a home and agree to pay $250,000, but a bank’s appraisal determines the home is only worth $235,000, the bank isn’t going to approve the loan because the sale price is $15,000 above the home’s current value. To get the loan approved, you’ll have to renegotiate the sale price with the seller, or pay the difference out of your own funds.

  1. Employment surprises

With regard to your employment, do not hide anything from your mortgage lender. Even a seemingly minor employment change can delay your mortgage approval. For example, if you plan to start maternity leave before closing, make sure your mortgage lender is aware of your plans. Or if you know you’ll switch positions or change companies at some point before closing, tell your lender about this change ahead of time.

Prior to closing, the bank will contact your employer again to re-verify your employment status and income. Finding out that you no longer work for the company or that you don’t hold the same position can delay the mortgage approval.