HERE WE GO AGAIN! LENDERS TO RECHECK CREDIT PRIOR TO CLOSING!!!. Another possible delay to closing your loan. Lenders are now required to repull credit prior to closing a loan.
WHY repull credit? To be sure the borrower has not had any inquires or more importantly opened new accounts that affect their ability to repay the mortgage loan.
WHY IS REPULLING CREDIT A PROBLEM? Many purchasers of new or different homes, particularly first time buyers do take on additional credit because they need appliances, a mower, maybe new carpet. We all know the variety of reasons a buyer may inquire about new credit.
With the new regulations the question is WILL TAKING ON NEW CREDIT ALTER A BORROWER'S ABILITY TO REPAY THE LOAN???
It is another sign that the big investors are not taking chances on loans they purchase. Realtors and Loan Originators need to be advising applicants about this latest change. Lenders are coming up with their disclosures to the borrower about this; I just received a 6 page document to add to my loan package from one lender. Not very environmentally friendly.
Another question is WHAT HAPPENS WHEN THE LENDER REPULLS CREDIT PRIOR TO CLOSING and the borrower has taken on new debt. Bottom line is if the borrower still qualifies with the new debt the loan can close, but count on a delayed closing.
THE BIGGER QUESTION IS: WHAT IF THE BORROWER IS DISQUALIFIED AFTER REPULL OF CREDIT? If the borrower is trying to refinance, we are going to have a very unhappy borrower, For a buyer who is moving to a new or different home he has spent money on appraisals and inspections he cannot recoup.
LESSON HERE! LOAN ORIGINATORS, REALTORS EDUCATE YOUR BORROWERS.
Comments(1)