We Are Pulling Credit Report Right Before Closing

Fannie Mae made some changes in the last 30 days that could delay closings… as a lender, we are now required to verify that any credit inquiries you have in those last few days prior to closing are not really an extension of credit!  So don’t buy a sofa, or a refrigerator… or ANYTHING ELSE between the time of loan approval and closing… or you could be jeopardizing your closing date!

Effective with loans closing 6.1.2010 Lenders are now required to run a second credit check right before the loan funds… just to make sure you haven’t run up your credit cards, bought a new car, or added any sort of debt DURING THE MORTGAGE PROCESS.  (for more details click here)

In some cases, credit may NOT pulled again… but the lender will still be able to see additional liabilities. If any new debt appears, the loan does not pass GO, you are headed straight back to the underwriter to be re-approved.

Here are the rules for managing your financial life DURING THE PROCESS of making an application to buy a house:

1. Don’t use your credit cards or keep use to the bare minimum.
2. Don’t take on new debt by buying a car, a boat, or a vacation to Mexico.
3. Don’t close credit cards and place balances on a new cards.
4. Don’t co-sign with anyone on a credit transaction.
5. Don’t close checking accounts, savings accounts, and then move money into new accounts.
6. Don’t put any LARGE deposits into your checking or savings accounts. If you do, keep a record of where the money came from…copy all documents: withdrawal and deposit slips, and the check. You are going to need to “source” the funds, that is, explain where the money came from.
7. Don’t use your equity line.
8. Remember: lenders do not allow you to come to closing with green paper money that your have hidden in your mattress. Don’t even disclose you have it.
9. If you are required to pay off debt to qualify, don’t do it in advance, since proving the account is paid off can be a problem. Pay off debt right through the escrow company in conjunction with your closing.

• Your funds to close the loan cannot come from an account that you have not disclosed to the lender. Neither can your deposit on the house. All money that goes into the transaction must come from an account that was revealed on your credit application.

If you are considering a new home purchase, and FHA home loan (or a refinance) in NC – please call Steve and Eleanor Thorne, Mortgage Banker in Cary , 919-649-5058.  We can help you though the process… and we have the best mortgage loan rates!