Credit Do’s & Don’ts Before Closing:

A new rule (Fannie) called Loan Quality Initiative went into effect on July 1, 2010 that requires lenders, BEFORE CLOSING, to check credit to make sure borrowers have not incurred any new debts. If borrowers incur MORE debt, and it affects the underwriting ratios by more than 2%, the loan will have to be re-underwritten prior to closing.

Don’t – Allow multiple credit checks
Don’t – Apply for new credit within 45 days of signing a contract
Don’t – Shop for new credit before closing (Furniture, cars, etc)
Don’t – Go on a spending spree (using your credit limits) to buy things for your new home.

Do – File tax returns and/or extensions
Do – Explain or documents all inquiries on your credit report
Do – Disclose all Debt—even if it did not show up on your credit report
Do – Work with a knowledgeable lender

The information provided has been based on rules and regulations issued by Federal Agencies and interpreted by MortgageCurrentcy.com.