Did you know that starting on June 1, Fannie Mae is requiring all lenders to check borrower’s credit reports in the final days and moments prior to closing? Wondering how this can affect you?
Let’s say you were pre-approved for a mortgage 4 months ago. You found the house of your dreams and your offer was accepted. While waiting to close, you decide to open a new credit card or finance a new car which creates new debt obligations for you. Your new debt obligation will now show up on your credit report and your debt-to-income-ratio may now be higher than the lender allows. This could cause last minute delays for you at closing.
The moral of the story is to think twice before taking on any new debt prior to closing on your home. This is especially true if the purchase price of the home is at the top end of your pre-approved loan amount. It leaves you very little wiggle room and you could lose the home in the process. Wait to make those additional purchases until after closing. Preplanning and knowing what to expect throughout the entire buying process is crucial.
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