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honeybun35's avatar

How could someone be pre-qualified for mortgage then denied?

Asked by honeybun35 (979points) May 9th, 2023

I was pre-qualified for a mortgage just a week ago. I even spoke the lender earlier today. Just received a denial letter. He wasn’t going to even tell me until I texted him about the letter.

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11 Answers

Tropical_Willie's avatar

Interest rates are still moving in some markets and that may have caused you to not qualify. Ask the lender WHY !

Lightlyseared's avatar

Pre-qualified and pre-approved are not the same. Pre-qualify is an indication of how much you may be able to borrow. It’s a soft credit check based usually on self reported financial info. Before they actually approve the loan they’ll make a much more thorough assessment and may not reach the same conclusion. And as @Tropical_Willie said the market is pretty dynamic at the moment and lenders are increasingly risk averse.

JLeslie's avatar

I agree with the above maybe you weren’t pre-approved? Were you given a pre-approval letter for the amount you wanted to borrow?

cookieman's avatar

What @Lightlyseared said. You’ll want to get pre-approved, if possible. Then your shopping with real numbers.

Forever_Free's avatar

Denied based on what? Legally they must tell you why.
You may be pre-approved or pre-qualified for a certain amount of money, but they still can deny based on the property for many reasons.

SnipSnip's avatar

Change in circumstances.

JLeslie's avatar

Did you charge a lot on a credit card in the past week? Or, something else that changed your debt?

Blackwater_Park's avatar

Pre-qualification is not the same as underwriting. Also, banking is in trouble right now and they are tightening restrictions on lending.

SnipSnip's avatar

You can bet a prequalification can disappear if the expected mortgagor gets fired from his or her job. @JLeslie That is, by definition, a change in circumstances.

JLeslie's avatar

Did the OP lose their job?

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