I have a client that has been looking for just the right home for several months. We were armed with a lender pre-approval letter and all we needed was a home to buy. The stars aligned this past weekend and an offer we submitted was accepted. Yay us!
The paperwork was all signed and sent off to the lender and attorney. All we needed now was to clear the inspection. My buyers were really happy. So was I. All this is being told in the past tense? Yes.
Today the lender called me to tell me the buyer no longer qualifies for a loan. What? I said. You pre-approved him, twice! Yes he did said the loan officer, but when the checked his credit scores again they had dropped 200 points due to an unpaid bill. I was shocked. I have done business with this client multiple times before and there was never an issue. What had changed?
Well, this is a lesson for all buyers how one little thing can keep you from buying a home. Seems that my client had a credit card that charged him $200 as a yearly fee to use it. He called earlier this year and verbally canceled it. Apparently the card company did not cancel the card and the $200 for their fee rolled over, month to month, generating late notices in the credit files. This was enough to cause my clients credit numbers to fall 200 points, enough to drop out of the lender's minimum requirements, and the loan commitment evaporated.
First lesson, if you are canceling a credit card or credit line, put it in writing. Always. The second lesson, pay attention to statements arriving in the mail. Even if you think the line is canceled, make sure they have not stuck a last minute fee on the card that you now owe.
And remember, its the little things that can bite you.
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