Can I be denied after loan commitment?

Asked by Guzman_87, Chicago, IL Fri Sep 20, 2013

weve been going thru loan process for about a month. back and forth with underwriters. they've asked over millions of questions and we given them millions of answers. given them all the papers and satisfied all conditions so far. loan commitment should be done in about 2 days. after the commitment is done do underwriters stop asking for things?? I know right before close they check credit and employment but is the commitment pretty much a done deal??

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Matt Bukovy, Mortgage Broker Or Lender, Chicago, IL
Fri Sep 20, 2013

Once your commitment is done, you're going to want to start setting up the services for you new home: Gas, Water, Electric, etc. These are fine. HOWEVER, do NOT set up cable, phone, internet or security systems until a day before closing. This is because these services WILL pull your credit. And if you have your credit pulled, and the underwriter finds out, they're going to want to know why it was pulled, and whether or not any new debt was incurred as a result of that pull.

So don't do it!

2 votes
Christopher…, Mortgage Broker Or Lender, Lake Forest, IL
Thu Nov 21, 2013
The truth is in residential financing these days nothing is ever done. Once you have final approval clear to close they should stop, unless you have funding table conditions. In addition if there is any items that need corrections or clarification after closing most lenders have a form that you sign at closing called a Compliance Agreement making it so you cant refuse to assist after closing.

The process these days has become much more challenging then it has been in the past. The truly best thing that can be done is to find a lender or individual who understands and knows the trade. Then the process will be much smoother overall.

Chris Diamond
Diamond Residential Mortgage Corporation
NMLS 771882
1 vote
William Chu, Mortgage Broker Or Lender, Elmhurst, IL
Wed Oct 2, 2013
You are correct that before a Lender may/will certainly request another verification of employment. This so to confirm you are still employed and earning income to pay back the loan. No job -> No loan.

Once you know there is a "conditional" loan commitment, UNLESS all the back + forth with UW, underwriting, leads you to being CTC, clear to close, I recommend you ask your Lender to spend the time with you and go over all conditions in the loan commitment.

With Real Estate, nothing is a done deal until ... (1) you are CTC, (2) you show up to sign closing document, and (3) your loan is authorized to fund by the Lender.

Good luck!
1 vote
Annette Law…, Agent, Palm Harbor, FL
Mon Sep 30, 2013
Until you have the keys in your hand, the dance is not over.
If you are working with one of the big banks, you are more likey to be left at the alter than if you were working with a local lender.
Your agent provided you a list of lenders who have a track record of closing on time, under budget and without all the hysteria.
Anything can happen.
I do wish the best outcome for you.

Best of success,
Annette Lawrence, Broker/Associate
Remax Realtec Group
Palm Harbor, FL
727.420. 4041
1 vote
Priscilla La…, , Chicago, IL
Fri Sep 20, 2013
If something has changed with your credit or there's an issue with employment it could affect your loan approval. You can ask for a commitment letter to check if there are any pending conditions prior to closing, as well as the conditions at closing.

Good luck! I hope your closing runs through smoother.

Priscilla Land
Senior Loan Originator
Direct: 708-566-0661
1 vote
Jacqueline S…, Agent, Chicago, IL
Fri Sep 20, 2013
You should be fine, but don't change any of your circumstances before you close, i.e., quit you job, move a lot of money out the account you will be using to for the down payment, apply for any other credit, pay off lines of credit.
1 vote
Alexander Ro…, Mortgage Broker Or Lender, Chicago, IL
Fri Sep 20, 2013

Sorry to hear you've been put through the ringer. A lot of what you've gone through is due to inexperienced Loan Officers. A loan commitment should seal the deal. But, make sure to review the commitment. Some lenders put stipulations. READ THE FINE PRINT

Hope this helps

Good Luck!

Alexander Romo
Home Loan Expert
1 vote
John Meyers, Agent, Park Ridge, IL
Fri Nov 29, 2013
Not if you use a mortgage broker who does his/her homework before preparing a pre-approval letter.

I have a great broker at Wintrust Mortgage who has been a big help to my clients.

Just let me know if you would like his contact info.

John Meyers, Meyers Realty
c: 847-533-7115
0 votes
Chicago Apar…, Landlord,
Wed Oct 2, 2013
Yes, you can, just like the other agents below are saying. Let's say you get a loan commitment and something changed in your life. For example, you bought a new car, or you spent your reserve money and they check the day before you close, that could throw it off.

Best of luck in your new purchase.
0 votes
Jim Simms, Mortgage Broker Or Lender, Louisville, KY
Wed Oct 2, 2013
They probably will not give you a commitment, they might approve the loan but that isn’t a commitment. I know this sounds technical but you do not need a loan commitment in order to close the deal. So don’t worry if you do not receive a formal commitment letter.

There is a reason they keep asking for additional support documents and that is good news. The lender is trying to close your loan, work with them, they are helping you, good luck,

Jim Simms
NMLS # 6395
Financing Kentucky One Home at a Time
I answer questions about financing real estate based on my decades of experience dealing with mortgage underwriters. This answer is my personal opinion, has not been reviewed or approved by the company I work for. I do not offer legal or tax advice, if you need answers from an attorney or CPA find one knowledgeable in your local market.
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0 votes
Riccardo War…, Agent, Bolingbrook, IL
Mon Sep 30, 2013
yes you can if something comes up that was not known about upfront. However, that doesnt happen too often as long as all information given pfront was accurate.

Riccardo Wardlow
Quality Mortgage Lending


*We do Conventional loans down to a 620 score
*We do FHA loans down to a 580 score
*We do USDA loans down to a 620 score (no money down)
*We do $100 down payment FHA program
*Unlimited Loan To Value refinances on Fannie/Freddie refinances (only on loans originated before May 31st 2009
*We do VA loans down to a 620 score
*We give free counseling on what needs to be done to improve your credit score.
*We do 203k loans down to a 620 score
*We do reverse mortgages
*We do JUMBO loans to 12 million
*We do Itin loans
0 votes
Daniel Mirea, Agent, Chicago, IL
Sun Sep 29, 2013
Everything can happen until the closing!
0 votes
Melissa Goss, , Center Moriches, NY
Wed Sep 25, 2013
You sure can be denied after the commitment letter is issued. I was once told, no loan is approved until it closes. They can deny you at any time, but will always provide a reason.

Just be cautious if you got your letter- no big spending, no taking out new credit accounts/cards... just do as you have always done before you got your letter, and you will be fine.
0 votes
Manuel Brown, Agent, Chicago, IL
Tue Sep 24, 2013
No it it is not. I know someone who has been denied because they lost their job two days before closing.
0 votes
Michele Wils…, Agent, Lake Forest, IL
Fri Sep 20, 2013
Yes, if your financial situation changes before the closing.
0 votes
Matt Laricy, Agent, Chicago, IL
Fri Sep 20, 2013
You should be fine, but yes, you can get denied after.
0 votes
allan erps,A…, Agent, Pearl River, NY
Fri Sep 20, 2013
Certainly can be. There are many pitfalls like loss or change of employment, buying major ticket items during the process. Keep in mind that the Bank will dot every "I" & cross every "T" before clearing you to close.
0 votes
Ray Stevens, Mortgage Broker Or Lender, Cape Coral, FL
Fri Sep 20, 2013
To answer your question, yes. However, the initial commitment is usually conditional. Once you meet those conditions (and any new ones), the underwriter will issue an unconditional commitment better know as a Clear to Close.

Problems happen late in the game as the underwriter finally gets to review a condition previously requested and what they see is not good. Also, a soft pull credit report is done a few days before closing. Any new debt that shows up can get the entire loan denied.
0 votes
Santiago Ken…, Agent, Chicago, IL
Fri Sep 20, 2013
Yes of course a lot times this happen
0 votes
Philip Sencer, Agent, Chicago, IL
Fri Sep 20, 2013
Not these days. They always allow conditions on a loan commitment and often these banks will keep checking until the day of closing, but the odds of something negative happening should be pretty small, although not sure why all the millions of initial questions so there might be potential issues.
0 votes
Bill J Delig…, Agent, Naperville, IL
Fri Sep 20, 2013
You need to obtain a CLEAR to CLOSE.
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0 votes
Matthew Roder, Mortgage Broker Or Lender, Schaumburg, IL
Fri Sep 20, 2013
99% of the time it is a done deal. However, if something significant changes between the approval and closing, it could still be denied: loss of job, opening new credit lines, etc.
0 votes
Tim Moore, Agent, Kitty Hawk, NC
Fri Sep 20, 2013
Yes, normally it is unless something else pops up.
0 votes
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