A conventional loan appraisal will likely fail if the property has significant, visible health, safety, or structural deficiencies that render it unlivable or structurally unsound. Key failures include active roof leaks, faulty electrical systems, broken HVAC/plumbing, foundation issues, mold, or severe pest infestation. Appraisers also flag non-functional items, such as broken windows or missing handrails.
Conventional appraisals mainly assess a property's market value. They are nowhere near as strict as FHA appraisals, which examine the property's condition and similar sales in the area. Buyers and sellers have more room to negotiate repairs with conventional appraisals.
A house won't qualify for conventional financing primarily due to health and safety issues, structural problems, or significant deferred maintenance found during appraisal, like a bad roof, faulty electrical/plumbing, or foundation damage, as lenders need assurance the home is safe and retains its value. Other reasons include non-standard construction, being a unique property (hard to appraise/resell), or issues like underground tanks, environmental hazards, or major outbuildings needing repair, making it a poor investment risk.
Conventional Loans
In most cases, the following will be assessed by an appraiser on a conventional loan: The lot and home size. The home's condition (e.g., water or structural damage) Landscaping.
The "3-day appraisal rule" refers to requirements under the Equal Credit Opportunity Act (ECOA) for mortgage lenders to provide borrowers with a free copy of the appraisal (and other valuations) at least three business days before loan closing, and to notify them of this right within three business days of application; borrowers can waive the pre-closing timing, but the lender must still provide it promptly. This ensures borrowers see the property's value before committing to the loan, though the lender must also provide it promptly upon completion, even if the loan doesn't close.
Reasons your mortgage application may be denied include a dip in your credit score, increased debt, paperwork errors, a low home appraisal and unverified cash deposits.
When talking to a home appraiser, avoid pressuring them for a specific value, asking them to ignore issues, or trying to control their process, as this can be seen as manipulation; instead, provide factual details about upgrades and unique features while remaining polite and objective, letting them do their job. Don't say things like "I need it to appraise for X," "Zillow says my home is worth..." or "Can you leave out the short sales?" because appraisers must stay impartial and can be removed for undue influence.
The 3-7-3 Rule in mortgages isn't a loan type but a federal timeline from the TILA-RESPA Integrated Disclosure (TRID) rule, ensuring borrower protection by mandating disclosures within 3 business days of application, a 7-business-day wait between the initial Loan Estimate and closing, and another 3-day wait if significant changes (like APR) occur, giving borrowers time to review costs before committing to a loan.
A household earning $70,000 — about $10,000 below the median U.S. salary — could comfortably afford to spend about $257,000 on a house, assuming they put 20% down on a 30-year mortgage with a 6.5% rate.
In conclusion, several factors can hurt a home's appraisal value, including poor maintenance, location, lack of curb appeal, outdated features, misrepresentation of property size, and over-improvement.
The "3-3-3 rule" in real estate isn't a single guideline but refers to different strategies: for buyers, it's about financial readiness (3 months savings, 3 months reserves, 3 property comparisons) or a financial affordability check (30% income, 30% down, 3x income); for agents, it's a marketing habit (call 3, note 3, share 3) or prospecting (talking to everyone within 3 feet). There's also a developer rule (1/3 land, 1/3 build, 1/3 profit), though it's considered outdated by some.
A house won't qualify for conventional financing primarily due to health and safety issues, structural problems, or significant deferred maintenance found during appraisal, like a bad roof, faulty electrical/plumbing, or foundation damage, as lenders need assurance the home is safe and retains its value. Other reasons include non-standard construction, being a unique property (hard to appraise/resell), or issues like underground tanks, environmental hazards, or major outbuildings needing repair, making it a poor investment risk.
6 factors that can affect your mortgage application
One of the most common things homebuyers ask about is approval time. Typically, the mortgage approval process takes 30-45 days from application to closing, but that can vary based on several factors, including: Your financial situation and documentation readiness. The current real estate market and the lender's ...
Typically, you can expect to close 2 to 4 weeks after the appraisal, as this period allows for final underwriting, title clearance, and preparing closing documents, though it can sometimes be faster (around 2 weeks) or slower depending on lender efficiency, market conditions, and any issues found in the appraisal. A mandatory 3-day review period for the Closing Disclosure is also required by law before you can sign.
Credit score and property requirements
Higher credit scores help because they decrease lender risk and put less emphasis on LTV. Borrowers who are getting a single-family home in an established neighborhood with plenty of comparable homes nearby are more likely to get appraisal waivers.