3 Hidden Problems That Can Derail Your Mortgage Approval in New Hampshire

By Jason Starr

With over 30 years of combined experience, we understand the finer nuances of selling your home. We know where the seller's largest loss of revenue is when selling and the 4 reasons why a home doesn't sell. Want to learn? Contact us knowing you'll receive no pressure and total confidentiality.

What kind of problems can your New Hampshire house have that might mess up your mortgage? Certain issues with a property can bring the entire financing process to a halt. To get a clear understanding of what buyers should look out for, I sat down for a conversation with Jen McCall of Total Mortgage. Jen broke it down in a really simple way: it all comes down to what she calls the three S’s—Safety, Structural Soundness, and Systems. Let’s talk about what those mean.

1. Safety first. According to Jen, safety concerns are one of the big things lenders look at. These aren’t always major, but they matter. These include missing handrails or even second-floor doors that open up to nothing, with no deck, no balcony, and just a drop. Things like that are considered serious safety issues, and they can put the brakes on a mortgage fast.

2. Structural soundness. Next up is structural soundness, which is about the bones of the house. Examples of these are crumbling foundations or signs of pest infestations like termites or rodents. If there’s any hint that the home’s structure isn’t solid, that’s a red flag. Lenders don’t want to take on a property that could literally fall apart.

3. Systems that work. The third S is about the major systems in the home. That includes plumbing, heating, and electrical. All of those need to be functioning properly. If one of those systems is out of order, it can raise concerns during the financing process and might even stop things from moving forward.

What if one of the S’s fails? There are two main options. First, the buyer can ask the seller to fix the issue before closing. That’s usually the go-to, especially for safety problems. Most of the time, those have to be taken care of before the loan can close.

Second, if the issue is bigger or more complex, you can convert your regular mortgage into a renovation loan. That way, you can roll the cost of the repairs into your mortgage and take care of them after closing.

I asked Jen what those loans are called, and she said they’re usually referred to as renovation loans or “reno loans” for short. If it’s a government-backed loan, like FHA, you might hear it called a 203(k) loan, which is the official term.

Are there extra costs? Yes, and it depends on the size of the repair. You’d need to get a quote for the repair work, where the lender might hold some extra funds in case more problems pop up during the fix. It’s not always a small number, but for most buyers, it’s worth it to get those issues resolved and move into a home that’s ready to go.

If you want to know more or have more questions, don’t hesitate to reach out. Call or text me at 603-293-7227 or send an email to StarrRealtyNH@gmail.com. I’m happy to help.