But why do these disruptions happen in the first place? Why do mortgage applications go sideways? While it’s very possible that it could be that a bad lender was chosen, there are many other reasons disruptions can occur. Some of the most common include:
They’ve Pushed You to the Back of the Line
Just like in many other fields, getting a quick approval from a lender may be all about who you know. This is especially true of lenders who tend to put applications submitted by appreciated clients (such as mortgage brokers who work with them frequently) to the top of the line. In fact, some banks even have specific underwriters who work for high-volume clients who send over mass mortgage applications all throughout the month. This is why their applications will take priority and often get approved much sooner than any others.
What does happen to the others? Often times they either get put in the back or submitted to underwriters who are already jam-packed with applications to go through.
They’re Giving Your Application Special Attention
Not all mortgage brokers are great at their jobs, which is why some are not trusted by banks they've worked with in the past. Perhaps this is because they've bent the truth to try to get an approval or they weren't honest with the lender about other information. Unfortunately for you as the buyer, this can put extra scrutiny on your application just because it was submitted by that mortgage broker. Overall this can add up to a lot of extra time and jumping through hoops just to get an approval that should have been taken days or just one week.
The Paperwork Was Submitted Later Than You Thought
This one actually isn’t the bank’s fault but instead the mortgage broker’s fault. If they submitted your application late without telling you, it could hold up your approval for quite a bit longer. Unfortunately you won’t know if this actually happened unless they told you, because otherwise they’ll just tell you the bank hasn’t responded just yet.
They’re Not Aware of Your Deadline
When the majority of mortgage applications get sent to a lender, they get spread out between different underwriters working for that company. Once those applications hit their desks, they are prioritizes by the deadline. Of course this means that any deadline sooner than yours is going to be done more quickly, and that if you don’t have a deadline listed, you could end up waiting much longer than anticipated.
They Won’t Give Preferential Treatment to Clients Who Don’t Frequently Refer
Even if it’s hours until your deadline, you’re never guaranteed that the lender will take the time to go through your application and get the final approval done. This is even truer if you’re working with a mortgage broker who doesn’t have a relationship with that lender in particular. In situations like these, the lender is likely to just tell you to wait a few more days, to which the seller hopefully agrees.
When it comes to finding the best way to search for a home, the process is never guaranteed to go as smoothly as most people would like to think. Unfortunately this is especially true if you need to get a mortgage, because at that point you’re at the mercy of the bank to get the financing needed to make the purchase. However, if you make smart moves with choosing the best real estate agent and mortgage broker, the entire home buying process may go much better than you anticipated.