BUYING A HOME, DON'T USE YOUR CREDIT!!!!! SELLERS PREPARE FOR APPRAISAL REVIEWS!!!!!!!
In the market to purchase a home soon? Well be prepared to keep those credit cards under lock and key. Fannie Mae Guidelines requiring lenders to run credit just prior to closing on buyers under contract is surprising some purchasers and actually causing some to have their loans declined within days of closing.
As a real estate consultant that specializes in Buyer Agency as well as Seller Listings, I am always surprised to hear of buyers who don't realize that using existing credit or acquiring new lines of credit when they are in the process of purchasing property can jeopardize their chances of securing financing. So let's be clear: lending institutions utilize a Debt to Income ratio when reviewing an applicant's mortgage file and that ratio has limits. Making any large purchases even on exisitng line of credit can place those ratios at risk. And by all means, do not open any additional lines of credit; soÂ the new car, the couch and appliances will most likely need to wait until after the closing.
Now for Sellers: Fannie Mae is now also requiring up to 75% of all purchase mortgage transactions be subject to anÂ appraisal review before closing. So be sure to stay in close touch with your mortgage provider and agent to understand when this hurdle is actually cleared. Just remember, initial appraisal value may not be the final one, so be patient and prepared.