What Causes Mortgage Delays?

The Loan Process

Lenders take the borrower’s loan application and supporting documentation to come to a decision if they can approve a loan, and the amount the loan will be.

Your mortgage documentation possibly will include copies of your credit report, purchase agreements, tax records, paychecks, asset documentation, etc.

Mortgage Delays

Several things can cause mortgage delays that are frequently outside the borrower’s direct responsibility.

The appraisal can cause one delay.

The appraiser issues an appraisal report after inspecting the property that indicates what the fair market value of the property is. The lender reviews this appraisal report.

The appraiser may have difficulty getting a high enough appraisal value either for a purchase or for a refinance. A few appraisers may be a little more aggressive than others, but their appraisal reports still need to be realistic. Sometimes a property is not worth what the property owner thinks it is. These can sometimes be very large gaps – a borrower who thinks their house is worth $700,000 finds out after the appraisal it is worth only $530,000.

Contract Delays

There may be errors in the purchase agreement.

Often real estate agents will insert addendums to the purchase agreement. Sometimes these are not worded correctly and may cause problems with the mortgage lender. The lender can and will delay the loan if there are troubles with the purchase agreement.