Financing in 60565>Question Details

Hnms06, Home Buyer in 60565

Will my mortgage company recheck my credit score before closing?

Asked by Hnms06, 60565 Tue Jul 21, 2009

My husband and I are in the process of buying a home. Our experience with our mortgage company has been a nightmare. Never answers phone calls, doesn't answer questions, we feel lucky to receive a call back. We are getting a 203k loan (FHA on a HUD house) that we hear is a labor intensive process. We have ran in to a few major problems and tried to change lenders the new lender checked our credit and said we needed a 660 credit score we both had 640 so we stayed with the original lender. We are now 2 1/2 wks until we are supposed to be closed and have been told that out loan is denied unless my husband can get switched to being paid by the hour for 2 wks. He was with one job for over 2 yrs and switched to another one and has been there for a month. They said they couldn't know how much he would be making unless he got paid by the hour?!? So we found another company that said this was not a problem and my husband without thinking about let them check our credit....

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Hnms06:

Nice. You should only need a 620 score for a 203k loan so I have no idea what is going on there. If you switch to a new mortgage company they would check your credit. If you stay with the same company they wouldn't need to recheck your credit assuming you close and fund within 120 days of when the credit was last pulled.

As far as the job deal, is he paid commission or is he on a 1099 (self employed, they don't take taxes out of his check)? If so, that is why they need him hourly. If he's salary, no big deal.

I hope this helps and call me or email me with anymore questions.

Sincerely,

Kurt Clements
Senior Vice President
GSF Mortgage
3933 75th St
Aurora, IL 60504

Office: 630.806.7016
Cell: 630.430.1091

kclements@gsf-mortgage.com
http://www.gsfgovernmentloans.com
0 votes Thank Flag Link Wed Jul 22, 2009
Hmnms06,

I would agree with Tony that communication is the key to this.
We do many 203K's and the minimum credit score is 620 not 660.
This is probably due to the lender trying to make enough money to compensate for their time.
The 203K is a great loan but is a bit expensive.
If you are not getting "instant equity" it may not be worth doing.
As far as the employment issue that is a lender specific issue.
Most lenders would ask for a contract offer from the new employer as well as 1 months pay stubs.
It sounds like that is not a big problem as long as you are not a commission job.
One of my co-workers has wrote a great blog about the 203K.
Please take a look and this may be a little more information for you.
http://www.trulia.com/blog/david_cruickshank/2009/07/rehab_a…
We also have a 203K flyer on our web site listed below.
If you have any other questions please do not hesitate to contact me anytime.

Steve Smither
Ardain Mortgage
ssmither@ardain.com
847-942-5151
0 votes Thank Flag Link Wed Jul 22, 2009
There's a possibility they may recheck your scores. You seem to be rather worried about it so maybe you need to ask the question of the lender.

At the closing table, you're going to sign a piece of paper that says you've done nothing to affect your ability to purchase the home since making the loan application. So, maybe that's what you say to get the conversation started with your lender.

Whenever you purchase a home, you should never do anything that could change your ability to purchase the home between the time you sign the purchase contract and closing. You don't change jobs, you don't apply for other loans or credit cards, you don't buy a car, and you don't change lenders unless absolutely necessary (and I understand sometimes it's necessary). All of those things will affect your credit score.

Good luck with your closing. And, remember, if you're first time homebuyers, you have an incentive coming to you!
Web Reference: http://www.MicheleNixon.us
0 votes Thank Flag Link Wed Jul 22, 2009
203k mortgages can be tricky. That's why many lenders won't even go near them.

Don't take this the wrong way, but some of this you may have brought upon yourself. First that it is a 203k loan, which is very complicated in the first place, but also switching jobs in the middle of the process and trying to switch lenders. Also, you didn't mention WHY the credit has decreased. Have you made late payments, opened up new accounts, or added at all to your debt? It might not be the lenders fault here, but either way it sounds like there is a communication breakdown.

With that being said, it is very possible they will pull a new credit report prior to closing. It depends on their policies, as well as the policy of the investor (if they are a broker selling the loan). Any pre-approval is contingent on your financial condition (including credit and employment) remaining unchanged from the time of application. Either way I would speak to the loan officer immediately. If you cannot get a hold of him ask for a manager. It doesnt sound like they are asking for anything out of the ordinary with regards to the job switch. Income must be fully documented. Normally you need a signed offer letter outlining the terms of compensation along with a month or so worth of paystubs, and it's gotta be hourly or salaried - no commission or anything like that. Voice your concerns to the lender or his manager and hopefully you can get resolution - good news, bad news, or otherwise

Good luck!
0 votes Thank Flag Link Wed Jul 22, 2009
There are ways around this, talk to your broker about it and ask him to discuss it with their processor and the bank, they all know the implications of credit check and will help make sure you stay on track.
0 votes Thank Flag Link Tue Jul 21, 2009
.... His credit score is now 624. Our current lender requires a 620. We have finally worked something out with his employer so we can stay with our current lender and decided this was best because we only have 2 weeks before we have to start paying $25 a day for taking too long. Will our lender recheck our scores before closing and if so should we be worried about being so close to the required credit score?
Thanks for you help any help will be greatly appreciated this whole experience has just been aweful!
0 votes Thank Flag Link Tue Jul 21, 2009
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