21
Oct
By Fred Gruber
Mortgage Tips

Why Unpermitted Renovations Can Create Problems During Mortgage Approval

A remodeled kitchen, converted garage, or added bedroom can make a home look more appealing. But a beautiful renovation does not always tell the full story. If work was completed without permits that were required locally, buyers may encounter questions during the appraisal, inspection, or mortgage approval process.

What Does Unpermitted Work Mean?

Building departments often require permits for certain structural, electrical, plumbing, and other improvements. Requirements vary by location and by the type of project. Replacing cabinet hardware may not require approval, while moving load-bearing walls or adding living space often does.

Unpermitted work means a project was completed without obtaining a permit that should have been issued. It does not automatically mean the work is unsafe, but it may mean that required inspections and documentation are missing.

Why a Lender Might Be Concerned

A mortgage lender evaluates the property securing the loan, not just the buyer’s finances. If an appraiser observes a questionable addition or conversion, the lender may ask for clarification about the home’s condition, legal use, and marketability.

For example, a garage converted into a bedroom might appear in the listing’s square footage even though local records still describe the space as a garage. A lender may need to know whether that space can be counted as living area and whether it creates a safety concern.

The response depends on the particular improvement and mortgage program. Some issues may require documentation or repairs; others may not prevent financing.

Square Footage Can Be Misleading

An attractive addition may increase usable space without increasing the area an appraiser can recognize under applicable measurement and appraisal standards. Buyers should compare listing information with public records and ask questions when the numbers differ.

A seller’s claim that an improvement added substantial value is not a substitute for an appraisal. The market may value the space differently depending on its quality, legality, and function.

What Buyers Can Do Before Closing

Ask the seller for permits, final inspection records, contractor information, and any documentation related to major improvements. If records are unavailable, discuss the concern with the appropriate local authority and qualified professionals.

Tell your mortgage professional about questionable renovations as soon as you discover them. Waiting until the final stages of underwriting can create avoidable delays.

An unpermitted improvement does not automatically make a home impossible to finance. The key is understanding what was changed, whether it meets applicable requirements, and what documentation the lender needs before moving forward.

09
Sep
By Fred Gruber
Mortgage Tips

What Happens If Your Income Changes Before Closing?

Getting approved for a mortgage is an important milestone, but the financial review does not necessarily end once you receive an initial approval. Lenders may verify certain information again before closing, including your employment and income. If your income changes during this period, it could affect your mortgage approval, depending on the circumstances.

Why Income Still Matters Before Closing
Your mortgage qualification is based partly on the income documented during the application process. Lenders use this information to determine whether your income meets the requirements for the loan and whether your monthly obligations are manageable.

Because closing may occur weeks after the initial application, lenders may perform additional verification before the loan is finalized.

Not Every Income Change Is the Same
A raise or promotion may have a very different effect than reduced hours, a change from salary to commission, or leaving a job entirely. Starting a new position may also require additional documentation.
Even when a career change appears financially positive, the lender may need to review the new employment arrangement before proceeding.

Tell Your Loan Professional About Changes
If your employment, hours, compensation structure, or income changes before closing, communicate with your mortgage professional as soon as possible.

Do not assume that a change is too small to matter. Providing information early gives the lender an opportunity to determine whether additional documentation is required.

Avoid Making Unnecessary Career Changes
When possible, the period between mortgage application and closing is generally not the ideal time to make major employment changes without first discussing them with your mortgage professional.
If a change is unavoidable, keep documentation related to your new compensation and employment.

Stay Financially Consistent
Income is only one part of your financial profile. Large purchases, new credit accounts, additional debt, and unexplained changes in your finances can also create additional questions before closing.

Your financial situation at closing should remain consistent with the information used to approve your mortgage. Staying in communication with your mortgage professional and reporting changes promptly can help prevent unexpected complications as you approach the finish line.

03
Jul
By Fred Gruber
Mortgage Tips

Why Small Financial Changes Can Delay Your Closing

As closing day approaches, many homebuyers assume the mortgage process is nearly complete. While that is often true, lenders may continue reviewing your financial information until the final approval is issued. Even small changes to your finances can create new questions, require additional documentation, and potentially delay your closing. Knowing what to avoid can help keep your home purchase on track.

New Credit Can Create New Questions
Opening a new credit card, financing furniture, or applying for a store account may seem harmless, but new credit can affect your mortgage file. Lenders may need to review the new account, calculate the monthly payment, and determine whether it changes your debt-to-income ratio. Waiting until after closing is usually the safer choice.

Large Deposits May Need Documentation
If a large deposit appears in your bank account, your lender may ask where the money came from. This is not unusual, but it can slow the process if records are not available. Funds from gifts, bonuses, transfers, or account withdrawals may need a clear paper trail before they can be accepted.

Changing Jobs Can Affect Timing
Even if a new job is a positive career move, changing employment before closing can require additional review. Lenders may need to verify your new position, confirm income details, and request updated documentation. If you are considering an employment change, speak with your mortgage professional first.

Moving Money Between Accounts Can Add Steps
Transferring funds between accounts may seem simple, but it can create additional documentation requirements. Lenders need to verify the source and movement of funds used for closing. Keeping your accounts consistent can make it easier to confirm available assets.

Small Choices Can Have Big Timing Impacts
Most financial changes do not automatically stop a mortgage approval, but they can add time to the review process. When closing deadlines are approaching, even a small delay can create stress for buyers, sellers, agents, and everyone involved in the transaction.

The safest approach is to keep your financial picture steady until after closing. Before opening credit, making large purchases, changing jobs, or moving money, contact your mortgage professional. A quick conversation can help you avoid preventable delays and get to closing day with greater confidence.