Another Credit Cotcha

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A recent change to your Mortgage qualifying process has been adopted by all Lenders. Banks now run a NEW Credit Report on the Day your loan is due to fund i.e. ONE DAY BEFORE CLOSING. If you have taken on any new debt since applying you might no longer qualify for your loan and be unable to close the deal. If you have removed your loan contingency this could put your deposit at risk.

This applies to both Purchase and Refinance Loans.

If you have applied for any NEW Credit since you were preapproved the loan underwriter will be required to call the new trade line and get proof that no new credit was extended.

If new credit was extended, they will recalculate the debt to income ratios and the application will need to be re-underwritten. Even if you still qualify THIS WILL CAUSE A SIGNIFICANT DELAY TO CLOSING.

This delay could potentially ruin the whole deal.

I personally have had 3 of these situations happen. Fortunately none of them caused major problems but in all cases caused between 7 and 10 days delay in closing.

 If you have made any new credit application since being qualified,

tell your Real Estate Agent, and Loan Agent right away and deal with it before it becomes time critical.

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