If you have proactively reduced the debt balance, it should not interfere with your ability to close your mortgage, even if the higher balance currently appears on your credit report when the lender runs the secondary check. You should also gather documentation that verifies that the debt has been paid down or off including proof of payment and the current account statement with the lower balance.
In the event that your lender performs a second credit check prior to closing and asks about the debt you can provide the letter as well as the supporting documents to quickly address the issue. If the lender does not run the second check there is no need to raise the issue or provide the documents.
With a little knowledge and preparation you should be well positioned to close your mortgage whether the lender checks your credit again prior to closing or not. Consumer Financial Protection Bureau, March 3 Michael possesses extensive knowledge about mortgages and finance and has been writing about mortgages for nearly a decade.
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The answer is yes. Keep in mind that within a day window, multiple credit checks from mortgage lenders only affects your credit rating as if it were a single pull. Credit is pulled at least once at the beginning of the approval process, and then again just prior to closing. The first thing I encourage any potential buyer to do is to get pre-approved. You can apply for pre-approval online, face-to-face or over the phone.
Lenders want to know details such as history of your residence, employment and income, account balances, debt payments, confirmation of any foreclosures or bankruptcies in the last seven years and sourcing of a down payment. They will need your full legal name, date of birth and Social Security number as well so they can pull credit.
Once you find a home within budget and make an offer, additional or updated documentation may be required. This is because other creditors realize that you are only going to buy one home.
You can shop around and get multiple preapprovals and official Loan Estimates. The impact on your credit is the same no matter how many lenders you consult, as long as the last credit check is within 45 days of the first credit check. Even if a lender needs to check your credit after the day window is over, shopping around is usually still worth it. The impact of an additional inquiry is small, while shopping around for the best deal can save you a lot of money in the long run.
Note: the day rule applies only to credit checks from mortgage lenders or brokers' credit card and other inquiries are processed separately. When you check your own credit — whether you're getting a credit report or a credit score — it's handled differently by the credit reporting agencies and does not affect your credit score.
If you are applying for a mortgage and haven't already checked your credit report for errors , do so now. You can get a free copy of your credit report at www.
If you find any errors, get them corrected as soon as possible.
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