What To Do If Mortgage Fell Through Last Minute
If mortgage fell through last minute, you can find yourself starting to panic. After all, chances are that you took the steps of scrimping and saving for your down payment, made the effort to getting your credit score where it needed to be, and did all of the homework necessary for uncovering a home that worked for you. And despite all of that, your mortgage still fell through last minute.
When this happens, it is only natural to be extremely upset. There will undoubtedly be a period of time filled with some choice words and strong emotions. Get it out of your system as quickly as possible.
Once you are done reacting, stop panicking. It is time to get to work.
A mortgage falling through at the last minute can happen for a number of reasons – from a buyer’s credit score or income situation changing since the pre-approval process to adjustments in lending guidelines. But you only have a small window of time to regroup and close the deal. So if mortgage fell through last minute, stop wasting time and energy on being upset and get to work on trying to resolve the situation. Now is the time to get busy understanding what happened and what you can do.
Ask Questions
If mortgage fell through last minute, the first place to start is with your mortgage professional. You will want to ask and understand the reason why your loan fell through in the first place. Once you know the reason(s), then it is time to take action.
Reason #1 : Appraisal
If the issue with your mortgage was due to a lower appraisal, work with the seller to see if there is a way to reduce the sale price. While sellers want to receive as much as possible for their sale, they also do not want to miss out on a sale altogether. So there are times when a seller might be willing to be flexible with a buyer if mortgage fell through last minute.
Reason #2 : Change in Guidelines
There are times when a change in lender guidelines can result in a mortgage falling through. If you are working with a mortgage broker, you can ask him or her to submit your mortgage application to other lenders. Additionally, you can ask the broker to refer other loan options available outside of the company.
Reason #3 : Bigger Down Payment
Situations arise where buyers need a bigger down payment in order to complete the mortgage process. Sometimes this is because the buyer’s debt-to-income ratio is too high or a change in the lender’s guidelines. In situations like this, buyers should explore options around qualifying for a Down Payment Assistance Program (DAP). You can ask your mortgage broker to help research any DAP funds you might qualify for.
Another option for uncovering funds to contribute to a larger down payment is to borrow from a retirement account or receive monetary gifts from family members. These options come with their own list of pros and cons so be sure to understand what they entail before pursuing.
Reason #4 : Drop in Credit Score
Keep in mind that your lender will check your credit score throughout the process, right up until the end. If mortgage fell through last minute because of a decrease in your credit score, review your report to ensure it is accurate. Should you discover that there are errors, get them fixed as soon as possible.
If you are sellers working with a buyer whose mortgage fell through last minute, you can be left in a tough spot – especially if you need to sell your home fast. If you find yourself in this situation, give us a call today to see how we can help. We specialize in working with distressed sellers who need a quick sale.
