Fannie Mae’s ‘low quality initiative’ May Stomp Closing On a Mortgage!
Mortgage credit checks may now hinder you from purchasing your home. Fannie Mae, as of June 1st, will require that all lenders order a second full credit report and screening before closing on a mortgage. The reasoning behind this initiative is that borrowers, when they find out that they have been approved for a mortgage loan, will often times go out and purchase home furnishings,etc at retails shops on credit. A dramatic difference in your debt-to-income ration from when your credit was first checked could make your mortgage deal turn sour. Marc Savitt, president of the National Assn. of Independent Housing Professionals and a mortgage broker in Martinsburg, W.Va., says it’s not an uncommon scenario. “Most often the new debt involves furniture or other goods for the house,” Savitt said. “However, we have seen debt for new cars and other major purchases.”
So if there is no way around, this what are borrowers to do? One, maintaining communication with your lender is extremely important. Secondly, as many lending institutions and credit reporting companies suggest, simply put, do not spend! During the period from when you first apply for a mortgage until the day when the closing occurs, borrowers should resist spending and should keep in contact with their lender about any possible decision to purchase something on credit. Don’t spend a dime till you have the “go ahead” from your lender. The last thing you want is to lose out on purchasing your home due to some credit procedure or delay in formalizing mortgage paper work due to changes that have to be made by the lending institution.
It should be noted that Fannie Mae has put this process in place to cut down on underwriting and fraud by borrowers. Find out more about Closing On A Mortgage by contacting or visiting Dave Murray . You may also visit The Washington Post, here, to read an article about the above subject.
This entry was posted on Saturday, May 22nd, 2010 at 5:45 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
