The real world we live in is often very different than how it is portrayed on the evening news, the local newspapers and what we are led to believe by our government officials. Disputing a minor issue in a credit score could end up hurting your credit score adversely. Common sense for home buyers needs to prevail. The time for home buyers to check out our credit scores needs to be well in advance of buying a home. When a home buyer waits to address a minor credit issue just about when they are to close...that may trigger some unforeseen consequences and sometimes Fairfax VA homes buyers may find themselvees in a position where they cannot move forward, or ending up with a higher mortgage rate. If we know what the issues are in advance, we are better positioned to take care of them before we write a contract. "Forewarned, is forearmed!" Home buyers need to understand that the mortage rates they will receive in today's world are highly influenced by our credit scores. For the most part if a mortgage company advertises a particular mortgage rate...it must be understood that this is normally the best mortgage rate - for persons with perfect credit scores. Everyone else will pay more for the rate because the risk is considered higher if you score is lower. That is just a small detail left out of all the mortgage advertising these days. However, home buyers you need to leave well enough alone. If you have a incredible credit score and qualify for the best rates...sometimes it is better to leave it be rather than challenge it just prior to a closing. Let sleeping dogs lie! An attempt to remedy or explain a minor credit issues may ignite more than you bargained for. The move to remedy or explain an credit item may send up a flag and lenders and underwriters may make a false assumption into thinking your credit is being looked into. In other words, they may feel there is a problem. It is wise sometimes to have a "Leave well enough alone attitude!" In many cases, that may make more sense than to try to tweak up a great score just a little higher.
We wrote this blog based on the fact that disputing a credit score could have undesired consequences... is not an uncommon scenario in real estate these days. In fact, recently in our busines...this was the third deal that either went south altogether this week or stalled because in one instance a buyer with a great credit score (800+) who pays their bills on time and usually in full every month decided they wanted the highest score because they warranted it. However, there was a dispute on some small bill, maybe the account in question was closed after the dispute was settled. As a result of the dispute, the score is not absolutely perfect. In the other instances, the buyer rightly disputed something, it was settled in their favor and noted with documentation, but when Fannie Mae notes the dispute, it's policy to send it back for manual underwriting. Manual Underwriting are two words that surpass any other curse epithet with two words other than the F bomb. If you are fortunate enough to be working with one of our lenders...where to get your loan through providing you are willing to send your first grade report card and a copy of your entire family's vaccination records from birth - at least that's what the loan officers feel like they're asking them to do. It's absolutely voluminous the amount of information needed in a manual underwrite.
Fannie Mae and Freddie Mac are only covering their own assets. If a consumer has a dispute and it's a whopper and their fault it's noted only as a dispute so now the government is being extremely cautious (where it obviously wasn't in past years).