What's the Latest You've Had your Loan Denied?

[Anonymous]

We are currently in the approved with "conditions" phase for an FHA mortgage loan with Wells Fargo. Since we have basically no credit history they wanted 2 non traditional credit lines, W2's for past two years and bank account statements. Was wondering how late in the game they can cancel your loan or if any of you have any experiences you want to share. Like most, we are in pins and needles. We have a home we found - offer accepted and we LOVE the home. We're putting 36% down and are due to close on Aug. 22. Thanks in advance!

[MissMia75]

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@Anonymous wrote:

We are currently in the approved with "conditions" phase for an FHA mortgage loan with Wells Fargo. Since we have basically no credit history they wanted 2 non traditional credit lines, W2's for past two years and bank account statements. Was wondering how late in the game they can cancel your loan or if any of you have any experiences you want to share. Like most, we are in pins and needles. We have a home we found - offer accepted and we LOVE the home. We're putting 36% down and are due to close on Aug. 22. Thanks in advance!

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What strikes me as odd is that you are using 36% as a down payment and FHA goes as low as 3.5%. 

[Anonymous]

I don't think putting down 36% is odd at all even for an FHA loan. Too bad you were not able to go conventional.

[Anonymous]

I couldn't go conventional due to no FICO scores or credit history. At least that's what Wells Fargo told me. We feel really good though about this going through at this point. I just think they're going to ask for more documentation. 

[Anonymous]

Your loan can be denied while you're sitting at the table closing. Until the seller of your house has the check in their hand, nothing is set in stone.

[Booner72]

The latest we were denied was the day after closing, after I had the key, after I had the new appliances delivered.  The title co found a judgment on DH and we lost it all.  This is an unusual situation.  Child support  is heinous and he didn't have a judgment until they found out we were trying to buy.  I remember the child support "person" telling me "You are not going to buy a house" - when I was calling to get a statement of his years of on-time payments.  He owed 3K in arrears from when his stenchy ex was getting state benefits on the side, when they were still living together.  When they broke up she filed for the support and they backdated.

That was 9 years ago and I'm just now getting around to trying again.  Still traumatized and still won't believe it happens until funding, which will be at closing, per my request.

[dmorelli62]

It is my understanding that they can deny you up until the day before your close.  I just closed on a house and they were asking for documentation two days before closing even though I already had my commitment letter.  Plus, they kept asking for the same things over and over again.  It was frustrating.

I applied with two different lenders, a bank and a mortgage lender, then I used each one as leverage against the other one to get the interest rate I wanted and the commitment letter when I needed.  I had to pay for two appraisals though that was the downside.  However, it worked out to my benefit as I ended up with a 3.75 interest rate and a commitment letter a week before closing.   If you think there is a possibility you could get denied you may want to try that route although you do get another ding on your credit report. 

[boomhower]

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@dmorelli62 wrote:

It is my understanding that they can deny you up until the day before your close.  I just closed on a house and they were asking for documentation two days before closing even though I already had my commitment letter.  Plus, they kept asking for the same things over and over again.  It was frustrating.

I applied with two different lenders, a bank and a mortgage lender, then I used each one as leverage against the other one to get the interest rate I wanted and the commitment letter when I needed.  I had to pay for two appraisals though that was the downside.  However, it worked out to my benefit as I ended up with a 3.75 interest rate and a commitment letter a week before closing.   If you think there is a possibility you could get denied you may want to try that route although you do get another ding on your credit report. 

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Closing isn't the end.  It's not over until the loan is funded which can be a couple of days after closing.  As shown by the post above the loan can be cancelled after closing.  While extremely rare it does happen.

[justjunie928]

I think the folks in the areas that have table funding - funding confirmed before keys are turned over - have a better chance of being 100% done after the papers are signed.  there are areas where funding takes place a day or two after the papers are signed, that is where you run into the risk of the previous poster.  But yep, I've heard of last minute denials when folks were on their way to the title company to sign the papers - agan rare but it happens enough to stick out in your mind.