Every now and then I hear a story of a fellow Realtor or Loan Officer who was approved to buy a home, ratified a contract, and waiting for settlement day to come to purchase the home… when, kapow, the Buyer made a decision that sabotaged the purchase.
Don’t be that guy! Don’t:
–Open or apply for any new debt, increase balances on existing credit cards and lines of credit or let anyone from another lending industry (auto loans, credit cards, department stores, etc.) pull your credit report. It is the applicant’s responsibility to disclose to us any new or additional liabilities incurred up until and including the day of the closing of your loan.
Even if a creditor is offering a discount if you open a new card with them, you should avoid doing so until after the mortgage transaction is complete. This includes 90 days same as cash offers, etc. Opening any new debt or allowing a potential creditor to pull your credit report could alter your credit scores and/or increase the amount of monthly debt obligations that you are required to pay.
Any new inquiries that appear on the updated credit report will need to be addressed to prove whether or not new debt was opened and any new debt will have to be accounted for prior to closing. At the very least, this could delay your closing. It could also cause you to no longer qualify if your credit scores drop or your debts increase.
–Change jobs. If at all possible, try not to make a career move during the time between your mortgage application and the closing on your loan. Even switching jobs within the same company might have an effect. I know of a buyer who did this, and went to straight salary with none of the previous overtime he had been getting. He needed this overtime to qualify. Dead deal.
At the very least, changing jobs initiates the need for more paperwork, and may delay your closing if we don’t address it earlier on in the process. There could also be requirements about how long you are on a new job before closing can happen. Please inform us as soon as you become aware of any changes to your employment status.
–Pack away your check book, bank statements, tax returns, or other important paperwork, if you are purchasing a new home. We may need to ask for copies of important documents during the process up until the closing. In summary, DO NOT do anything that negatively impacts your ability to qualify for your loan. If you have any doubts about doing something CALL your Loan Officer first!
All lenders are required to pull a new credit report immediately prior to closing. Any changes from the initial credit report will require additional documentation and could cause a change to the underwriting decision on your loan.
Mike Parsons of Apex Home Loans
contributed to this article. Mike has been in lending over 20 years and is a great mortgage resource, he’s local here in Montgomery County, and he offers great rates & programs.
Don’t hesitate to contact Mike 301-440-3864, http://www.apexhomeloans.com/michaelparsons
BJ Matson, Realtor®
Home Buying Advisor • RE/MAX
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