A new rule (Fannie Mae) called Loan Quality Initiative went into effect on July 1, 2010 that requires lenders, Before Closing, to check credit to make sure borrowers have not incurred any new debts. If borrowers incur More debt, and it affects the underwriting ratios by more than 2%, the loan will have to be re-underwritten prior to closing. It could potentially delay closing on a property.
Here is some advise that will help you avod this pitfall.
Don’t – allow multiple credit checks
Don’t – apply for new credit within 45 days of signing a contract
Don’t – “Shop” for new credit before closing (Furniture, cars, etc)
Don’t – Go on a spending spree (using your credit limits) to buy things for your new home.
Do – File tax returns and/or extensions
Do – Explain or document all inquiries on your credit report
Do – Disclose all Debt – even if it did not show up on your credit report
Do – Work with a knowledgeable lender
As always your Real Estate Professional and Loan Officer are there to assist you through the process and to help you avoid any pitfalls.
If you are looking for a licensed Real Estate Professional, fell free to contact me no matter where you live and I will assist you in finding the right one. Anne Ridge BA GRI CHMS CNS SFR Coldwell Banker Residential Real Estate Clearwater Fl 727-215-5485.
