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You had finally found the perfect San Diego home. It was located where you wanted to live, in the right school district and had all of the amenities. You envisioned growing old in this home.
You were pre approved for your new San Diego Home Loan and did everything you were told to do. You even signed your final loan paperwork and were waiting to get your keys, when it suddenly happened. Loan denied. You can’t believe it! You signed all of your paperwork, paid for inspections, signed at the escrow office…the bank approved your loan for your San Diego Dream home. How could this be?!
Fannie Mae buys most of the mortgage loans in the US so they make the rules. Fannie Mae has a new policy that all loans must have a credit report pulled prior to funding. This is done after underwriting and usually after your loan signing. If you apply for new credit or make big changes with your accounts it could delay your San Diego mortgage loan or worse, get it denied.
We know it’s exciting to buy a new home and equally exciting to go shopping for new appliances but do not do this until you have been handed the keys! This and the clerk offering you 10% off of your new purchase if you put it on their card and its at 0% for a year. Regardless of how good your credit score is heed this warning or you’ll spend years talking about how a washing machine caused you to lose your first home.
Tips to ensure a successful San Diego mortgage loan transaction:
Don’t max out or overcharge existing credit cards – Running up your credit cards is the fastest way to bring your score down, and it could drop up to 100 points overnight. Once you are engaged in the loan process, try to keep your credit card balances below 30% of the available credit limit.
Don’t consolidate your credit card debt onto one low interest card – the balance on the new credit card (after the debt transfer) is under 30% or 50% of your available limit as defined above.
Don’t raise red flags to the mortgage underwriter – Don’t co-sign on another person’s loan, or change your name and address. The less activity that occurs while your loan is in process, the better it is for you.
Stay current on existing accounts – Late payments on your existing home mortgage, car payment, or anything else that can be reported to a Credit Reporting Agency can cost you dearly. One 30-day late payment can cost anywhere from 50 to 100+ points on your credit score.
Continue to use your credit as you normally would – Red flags are easily raised within the scoring system. If it appears you are diverting from your normal spending patterns, it could cause your score to go down. For example, if you’ve had a monthly service for Internet access billed to the same credit card for the past three years, there’s really no reason to drop it now. Again, make your changes after the loan funds.
Now more than ever an experienced San Diego Mortgage Planner is critical to avoid getting your home loan request denied. Call me at 619-285-2921 with any questions you may have about current requirements to get financing for a home purchase.
If you are in front of your radio tonight between 6 and 7 tune in to 107.9 FM to hear the radio show. If not you can hear the show live online at www.my1079.com by clicking the listen now button. I will be speaking about San Diego Real Estate and Mortgage market with Jeff Campbell from Jeff Campbell and Associates and we will be taking questions via his e-mail. Send an e-mail with any questions to myfavoriterealtor(at sign)yahoo.com to have your questions answered on the air.
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