Get the letter right before you make the offer
Deal-breakers between preapproval and closing
Desk answer
A preapproval rests on your finances staying the same. New debt, a job change, missed payments, large undocumented deposits, or a home that appraises low or fails the lender's property rules can each cause a denial after preapproval. Until closing, ask your lender before changing anything about your income, debts or accounts.
Last reviewed against the primary sources listed below.
Moves to avoid until closing
- Opening new credit cards or financing furniture or a car.
- Changing jobs or pay structure without telling the lender.
- Moving large sums between accounts without a paper trail.
- Co-signing for someone else.
- Missing any payment, even a small one.
Red flags an underwriter looks for
- Income that cannot be documented or does not match tax returns.
- Deposits with no clear source.
- Debts that do not appear on the credit report.
- Gaps between what the application says and what documents show.
When can a mortgage be declined?
At any stage up to funding. The final checks just before closing can include a fresh credit check and employment verification.
Questions buyers bring to the desk
Can I be denied a mortgage after being pre-approved?
Yes. A denial can follow a change in income, debts or credit, unexplained deposits, or a property that does not appraise or meet the lender's standards.
What is a red flag in a mortgage?
Common red flags include undocumented deposits, income that does not match records, undisclosed debts and recent new credit.
At what stage can a mortgage be declined?
At any point up to funding, including during final pre-closing checks.
How often does an underwriter deny a loan after pre-approval?
We do not know of a reliable public figure for this. What is clear is that most post-preapproval denials trace back to a change the borrower can control or a property issue.