Lenders re-verify your credit just prior to closing to look for any recent changes. In other words, although your credit was pulled at the start of the application, Fannie Mae wants your bank to pull it again, just in case something changed. This ensures that loans are priced properly, and are funded on the borrower’s risk at closing as opposed to at the time of application. This is because a lot can change while a loan is in process. This is especially important when the loan is for a purchase closing that won’t happen for 60 days or more.
Some of the things they’re looking for are:
• Did you add up debt on your existing cards while your loan was in process?
• Did you apply for new credit cards while your loan was in process?
• Did you finance or lease a car while your loan was in process?
• Did you make some other major purchase while your loan was in process?
Each of the above is a red flag to underwriting. If your “final” credit report shows more debt than your original credit report, your mortgage may be subject to a complete re-underwrite and, in a worst-case scenario, a loan application denial. Because credit scores are dependent on so many variables, the fact that you have new debts and a different ratio changes the whole credit picture and can really change the whole loan. So it’s very important to ask your lender before you sign up for credit cards to gain air miles, for instance, to see how this could affect your credit picture. This is also important even before applying for a mortgage.
Eli Garfinkel of Funding Resources Mortgage Company is an experienced and reputable loan officer. With a list of extremely satisfied clients, Eli specializes in great customer service and dealing with complex cases. Eli is available to answer any mortgage questions, without any obligation. Eli can be reached by phone or text at 732-278-6526 or via email egarfinkel@fundingrmc. com or in the office at 732-364-7373 ext 22. Please visit his blog: themortgagedoc.blogspot.com.
By Eli Garfinkel
