Two Credit Reports Now Needed for Conventional Loans

Mortgage and Lending with The Mortgage Experts at America's Mortgage, a Division of Cherry Creek Mortgage Co. NMLS #241555

Two credit reports are now needed for conventional loans. A conventional loan is any loan that is NOT a government loan - if a loan is not an FHA loan, a VA loan, or a USDA loan, then it is a conventional loan.

If the loan is a conventional loan, lenders are required to refresh the credit reports of all borrowers shortly before the closing. A refreshed credit report updates account balances, minimum payments, and credit inquiries (every time someone pulls your credit, you have a credit inquiry).

If there are any major differences between the original credit report and the refreshed report, they must be explained. This can cause delays in closings, and in some cases, can cause the loan to be denied.

How do you combat this new problem? Very easily. If you have applied for a mortgage, do NOT apply for any new credit (credit cards, car loans, furniture loans, increases in credit card limits, etc.) and do NOT charge more on your existing accounts. Wait until after the closing to buy all those things you need for your new house.


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Dan Edward Phillips
Dan Edward Phillips, Humboldt and Del Norte Counties, CA - Eureka, CA
Humboldt and Del Norte Counties, CA

Good Morning Chris, good information for home buyers to know.

Sep 30, 2010 02:31 AM #1
Andrea Moore
The Mortgage Market of Delaware - Milford, DE

Good information to share with buyers! One would think it would be common sense, but a lot of people need coaching.

Oct 01, 2010 06:16 AM #2
Ken Land
Fairway Independent Mortgage - Weddington, NC

I have a client that has an offer accepted for a new house and we are just waiting on the existing house to sell.  I told him up front that he needs to limit the use of his credit and try not to open any new accounts.  Two Saturday's ago he calls me all in a panic - needs to know right now whether opening a Best Buy Account for a 52inch plasma Samsung TV would hurt him.  They were apparently running some in store deal if you opened up a Best Buy account you received $500.00 off - The sad part was the TV was a purchase for the new house - not even something he needed or would use until he moved.  As I explained to him - that $500.00 could be the most expensive money he ever saved!  Besides - the day after Thanksgiving is much better time to look at TV's. 

He had already talked to me about wanting to start buying furniture on 24 mo no interest accounts -

This is an important thing to discuss and remind clients about throughout the process as it could certainly cause an issue.

Oct 05, 2010 02:46 AM #3
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