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Image: Wikimedia Commons

Image: Wikimedia Commons

People often assume that once their mortgage loan is approved, they’re finished with the credit check process from their lender. However, this is not the case. Since 2010, Fannie Mae has required lenders to re-check a borrower’s credit just before closing the mortgage. Taking on additional credit obligations between the time of their loan approval and closing may cause serious issues for borrower. These issues include the lender increasing the interest rate or, in the worst case, denying the loan altogether. This situation will most likely affect those who barely qualified for the mortgage loan in the first place. Taking out additional credit after mortgage approval but before closing may tip this person’s debt-to-income ratio over that required for the loan. In order to avoid this issue, the bottom line is to not take on any additional credit obligations until after the closing of your mortgage loan. See more on this issue in this New York Times article by clicking here.

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