Charlotte Homes for Sale
Nina Hollander
(704)779-0813

FannieMae instituted new credit rules on June 1st that many home buyers are not yet aware of, but which will have some serious impact on their ability to close on a mortgage. Essentially, what Fannie Mae has done is require lenders to verify that borrowers haven’t taken on any new debt during the mortgage application and underwriting process. Even after your loan may have been approved and is ready for closing, underwriters will be looking for the following information about your credit:

• An updated credit report prior to closing to show current credit card bills and minimum monthly payments. This updated credit report will replace the original numbers used at the time you applied for your loan. If your debt levels have increased just before your mortgage loan is ready to close, your loan could be denied.
• An updated credit score. If your FICO score drops in the time between your mortgage application and closing below minimum lending standards, your loan will be denied. And if it’s not denied, you may be subject to a higher interest rate which will increase your monthly mortgage payments.
• An updated credit report inquiry history. Underwriters will be looking to see if you have been applying for credit elsewhere and verifying that you’ve not incurred new debt from the time you applied for your mortgage loan.

What does this mean to you? Basically, it means you need to be very careful with your credit from the time you make a formal application for a mortgage until you actually close on your home. Here’s a list of important “Dont’s:”

• Don’t make major purchases (cars, boats, leases, jewelry, appliances, furniture etc).
• Don’t open new credit card accounts.
• Don’t apply for new credit until after you close on your mortgage.
• Don’t transfer credit card balances from one account to another.
• Don’t close any credit card accounts.
• Don’t pay charge-offs, collections, loans, credit cards without first discussing the impact with your lender.
• Don’t max out or over-charge on your current credit card accounts.
• Don’t consolidate your debt into one or two credit card accounts.
• Don’t take out any new loans.
• Don’t finance any elective medical procedures.
• Don’t quit your job, change industries, or start a new company.
• Don’t switch from a salaried job to a commission-based job.
• Don’t change bank accounts.
• Don’t transfer large sums of money between bank accounts.
• Don’t forget to pay your bills (even if some are in dispute).
• Don’t accept cash gifts without filling the property “gift” paperwork.
• Don’t make random, undocumented deposits into your bank account(s).

If you’d like a handy list of these new rules, email us and provide us with your name and email address and we’ll get a list out to you immediately.

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