When we meet with a client, one of the many pieces of information we give them is a one page sheet titled "TIPS FOR A SMOOTH LOAN APPROVAL".
This is a list of helpful tips to ensure an effortless loan process. These DO's and DON'T's will help avoid any delays with your loan approval.
Because of what is known as the Fannie Mae Loan Quality Initiative, we are going to make some changes to our previous verbiage. The reason for this is that FNMA is now requiring that a new credit report be pulled just before closing to ensure that the Borrower's credit "situation" has not changed since the beginning of the transaction. I guess they were finding that it was common for Borrower's to take on new debt before their mortgages closed, which contributed to higher rates of default. They are not requiring that new credit scores be issued (which could have really been an issue due to the complexity of the scoring models), but rather requiring a non-scored report with updates on all of the trade lines.
What we have been told is that underwriters are looking not only for new accounts, but for existing accounts where the balance and/or monthly payment has *changed* since the original report used for underwriting was pulled. Some loan officers have said that it should only be an issue if an account balance increased, but I am sticking with changed at all because I can see a scenario where an underwriter would say "where did they get the money to pay that account balance down by $5,000?", which would open a whole new can of worms.
Because of these changes, here is the new list of rules for Smooth Loan Approval:
DON'T use any credit accounts in a way that will result in a change of more than $100 from what shows on
DO continue making you mortgage or rent payments
DON'T make any major purchase (car, boat, fur, jewelry, etc.)
DO stay current on all existing accounts
DON'T apply for any new credit (even if you seem pre-approved)
DO keep working at your current employer
DON'T pay off charge offs/collections without a discussion with us first
DO keep your same insurance company
DON'T buy any furniture
DO continue living at your current residence
DON'T close any credit card accounts
DO call us if you have any questions
DON'T take out another loan
DON'T start any home improvement
DON'T finance any elective medical procedure
DON'T open a new cellular phone account
DON'T pay off any loans or credit cards without discussing it with us first
If you encounter a special situation, it is best to mention it to us right away so we can help you determine the best way to achieve your goals.
Comments (0)Subscribe to CommentsComment