Has Your Credit Report Expired?

By
Mortgage and Lending with First Heritage Mortgage NMLS #: 938761

Many of my pre-approved buyers in Richmond, VA have a problem: the real estate inventory is so low they cannot find a house to buy.  If this is you and you have gone through the pre-approval process but are then unable to find a house in a timely manner, it’s important to know that your pre-approval doesn’t last forever.  If your credit report expires, your mortgage advisor will want to re-pull it so that they are using the most accurate information to qualify you.

expired credit

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Why Does the Age of My Credit Report Matter?

If your credit report is too old and you go under contract based on the score and information on your old report, you could end up having a problem.  Your mortgage advisor will have to pull a new credit report, and, this could open the door to new information which could disqualify you.  Here are two examples:

  1. You made a late payment and your score has now dropped below the minimum requirement.
  2. You bought a car and you now have a new monthly payment that needs to be added to your debt to income ratio.  (Even if your credit report isn’t old and this happens, it will come up during the loan process, so always communicate this to your mortgage advisor.)

How Old Is Too Old?

Here are the agency (Fannie and Freddie) and government rules.  It’s also important to remember that investors will have overlays, meaning banks may have their own rules which are tighter.  An example would be that Fannie says your credit report is valid for four months but SunTrust only allows a report to be valid for 90 days for existing homes and 120 for new construction. (Note: Age is measured from the date of the document to the note date.)

Conventional

  • Fannie Mae: 4 months
  • Freddie Mac: 120 Days

FHA/VA/USDA

  • Existing Properties: 120 days
  • New Construction: 180 days

Your Appraisal May Expire As Well

Here’s some additional information to show when an appraisal is too old.  This could come into play if you are under contract on a short sale and bank approval is taking a long time.  Again, there are some investors who have overlays, or tighter rules.  (Note: Age is measured from the effective date of the appraisal to the note date.)

Conventional

  • Fannie Mae: Existing & new construction valid for four months
  • Freddie Mac: Existing & new construction valid for 120 days

FHA

  • Existing and new construction valid for 120 days

VA

  • Existing & new construction valid for 6 months

USDA

  • Existing & new construction valid for 180 days

My Advice

I recommend staying in touch with your mortgage advisor during the pre-approval process.  Let him or her know if you have had any late payments, bought a new car, made a large cash deposit, changed jobs, etc.  Your mortgage advisor wants you in a house just as much as you do, so keeping information secret in the hopes that it won’t be found out is in no one’s best interest.  The more I know as your mortgage advisor, the more I can help you. Also, if it’s been longer than 90 days since your pre-approval, touch base with your mortgage advisor to see if he or she recommends refreshing your credit report.

If you have any questions about qualifying for a mortgage, please contact me.  I am licensed to work with borrowers in the entire state of Virginia.  I can also refer you to other mortgage advisors I know and trust on the East Coast.

Comments (3)

John Pusa
Berkshire Hathaway Home Services Crest - Glendale, CA
Your All Time Realtor With Exceptional Service

Whitney - Thank you for the comprehensive list of information on expired credit report.

May 06, 2014 07:54 AM
Debbie Reynolds, C21 Platinum Properties
Platinum Properties- (931)771-9070 - Clarksville, TN
The Dedicated Clarksville TN Realtor-(931)320-6730

Excellent advise Whitney. All would-be buyers should read this.

May 06, 2014 01:52 PM
Tom Arstingstall, General Contractor, Dry Rot, Water Damage Sacramento, El Dorado County - (916) 765-5366
Dry Rot and Water Damage www.tromlerconstruction.com Mobile - 916-765-5366 - Placerville, CA
General Contractor, Dry Rot and Water Damage

I didn't realize that the credit reports for the different agencies were so varied Whitney.

May 06, 2014 03:36 PM