Please Do Not Incur Any New Debt During the Loan Process

By
Mortgage and Lending with Credit Werx, LLC.

This May Go without Saying but it does Bear Repeating

It is imperative that when you are in the process of obtaining a mortgage loan that you do not incur new debt. It is even better if you don’t even have your credit pulled at all. See the image below? (Screen shot of note on the bottom of an actual pre-approval) That is at the bottom of every single conditional approval that we receive. 

No New Inquiries Please

There is a very good reason for this. When we qualify you we calculate your debt to income ratio (DTI) and that has a lot to do with the risk associated with lending to you. Risk factors such as credit and DTI are calculated in when your loan is priced.

If you incur new debts that changes your DTI and with it the parameters of you mortgage. You may not qualify for the same interest rate pricing or fee structure anymore. This would mean that we may have to re-disclose which could cause delays and maybe even cause us to go over our contractual obligations.

Worse than that, depending on the amount of the new monthly debt, you may not even qualify for the loan anymore. We would hate to have to jack your rate or ultimately deny you for because of new debt that you may have incurred. So please do not take out any new loans, lines of credit, or anything else that may increase your DTI.

If you can help it don’t even have your credit pulled until after we close because if you do it will need to be explained. If you want to switch from one phone carrier to another please wait until after you have closed on your mortgage to avoid having to explain that inquiry away.

 

 

Thanks for reading and as always questions and comments are welcomed and appreciated!

Posted by

Christopher Ohlsen

37 Boynton Ave

(845) 243-5293 (Office)

(518) 565-0799 (Cell)

www.plattsburghmortgage.net

chris.ohlsen@guaranteedrate.com

 

 

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Topic:
Mortgage / Finance
Location:
New York Clinton County Plattsburgh
Groups:
Bananatude
Addicted to Active Rain
All About Mortgages/Mortgage Networking
Clinton County Real Estate
It's all about them (ThemThem)
Tags:
plattsburgh mortgage
new inquiries
credit inquiries
mortgage process

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Show All Comments
Rainmaker
1,289,051
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Christopher: 

You're absolutely right when you say that this message can't be repeated often enough ... or loudly enough. 

I'm featuring this post so as many eyes see it as possible!

 

Featured in BananaTude!

 

 

Congratulations!  Well Done!

 

Gene

Jul 19, 2014 12:39 AM #1
Rainmaker
81,535
Christopher Ohlsen
Credit Werx, LLC. - Malone, NY

Oh wow! Thank you Gene!!!

Jul 19, 2014 12:58 AM #2
Rainmaker
1,507,525
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Calabasas CA

I agree, it does not hurt remind future and present home buyers to be careful with their spending during the escrow period.

Congratulation on the feature!

Jul 21, 2014 05:46 AM #3
Rainmaker
81,535
Christopher Ohlsen
Credit Werx, LLC. - Malone, NY

Thank you Inna! I haven't actually failed to close a loan for this reason but I have had some borrowers take out new debt during the loan process and it has created a few more conditions that I had to obtain and get cleared. That caused delays and a couple of times it was close to being denied. I make certain to tell all of my borrower's not to take out any new debt until after we close.

Jul 21, 2014 06:04 AM #4
Rainmaker
2,214,615
Sharon Tara
Sharon Tara Transformations - Portsmouth, NH
New Hampshire Home Stager

Great advice, and not something that everyone is aware of.  I'm sure this will be helpful to many people!

Jul 28, 2014 09:52 PM #5
Rainmaker
81,535
Christopher Ohlsen
Credit Werx, LLC. - Malone, NY

Thank you Sharon! I really hope this is helpful to a lot of people. It is important that once someone is qualified for a mortgage that their qualifications do not change prior to closing. 

Jul 29, 2014 12:47 AM #6
Rainmaker
3,252,842
Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC

Christopher

So true . . . . you post is right on target  . . . . and far to many home buyers make that mistake.

Good luck and success.

Lou Ludwig

Jul 29, 2014 02:36 AM #7
Rainmaker
81,535
Christopher Ohlsen
Credit Werx, LLC. - Malone, NY

Thanks Lou! After running into this several times I thought it pertinent to write a post about it here on AR so that prospective home buyers may hopefully run accross it while doing some research. This is information that I share with every applicant because I strive to make the loan process as smooth as possible for all of my clients.

Jul 29, 2014 02:52 AM #8
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Rainmaker
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Christopher Ohlsen

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