So you been pre-qualified, found your dream home, negotiated a great contract and are waiting to close. Here are five key points to avoid blowing up your loan, and having a smooth and on-time closing day.
Fannie Mae recently implemented a new Loan Quality Initiative (LQI) campaign that involves some important changes to be communicated to home buyers. Most significant: Lenders will now be required to re-pull credit and re-verify employment immediately prior to closing day.
Here are some good old-school reminders for potential home buyers to avoid trouble after pre-qualification or closing delays -- even after underwriting approval:
• Don’t apply for or take out new credit. Any credit pulls will need to be explained and recalculated in debt-to-income ratios. Higher liabilities could sink loan approval. This includes new furniture or appliances, as well as cars, boats and motorcycles.
• Don’t change your employment. Now is NOT the time to become 1099/ independent contractor, retire, or change careers.
• Don’t co-sign for anyone else. You can be held responsible for the full liability.
• Keep your bank accounts steady. No overdrafts and all large non-payroll deposits will need to be sourced. Avoid spending your funds needed to close.
• Don’t max out your credit cards or stop paying bills.
Remember: When in doubt, ask your mortgage consultant prior to making a significant change to your financial scenario.