"Want a lender to delay or even cancel your mortgage closing? Then change your "borrower circumstances" between the day you apply for and the day you close a home loan."
"Lenders have gotten stricter in response to the mortgage meltdown. The latest tightening of the screws comes from Fannie Mae. The mortgage titan's Loan Quality Initiative, which went into effect June 1, requires lenders to track "changes in borrower circumstances" between application and closing."
It seems kind of silly to have to point this out to buyers, but there are certain no-no's when it comes to getting that mortgage loan closed on time.
Here are the 3 ways:
No. 1 -- Get a new credit card or auto loan
"Lenders have long admonished mortgage applicants to avoid getting new credit cards and auto loans while home loans are in underwriting. Fannie's Loan Quality Initiative adds urgency to this request."
"So at the eleventh hour, most lenders check credit for new accounts."
No. 2 -- Charge up credit cards
"Charging up credit cards with thousands of dollars' worth of appliances, tools and yard equipment is another surefire way to muck up a closing."
"Mortgage approval is based partly on debt-to-income ratio. The lender looks at the borrower's minimum monthly debt payments and compares them to income. If the ratio of debt payments to income is too high, the borrower could be turned down for a mortgage. Fannie encourages mortgage lenders to recalculate debt-to-income ratios just before closing."
No. 3 -- Change jobs
"Changing jobs is another good way to derail a mortgage before closing. Other potential deal-breakers include staying with a current employer, but switching from a salaried position to one where primary income comes from commissions or bonuses."
Not scared? Then, read the full article. Being forewarned is being forearmed!
If you have questions about what you see here, contact
Stephen M. Flatow
Stephen's Title Agency, LLC
StephensTitle@comcast.net
973-556-1628 Fax
If a person has a high debt to income ratio, or has charged up credit cards or job changes, that should absolutly should be taken into account when making a home loan. Unfortunatly homeowners are in the mess they are in now because of shaddy paperwork practices by a few greedy companies. We see heartbroken people everyday who are losing their homes despite their best efforts to hold on. It is really sad.Glad to see there will be more transparency.
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