Keeping Your Credit Status Quo While In Escrow

We’ve all heard of Christmas in July, but around my house, it’s more like Christmas in June.  It’s my second daughter, Carly’s birthday, my wife’s birthday, our anniversary, my dad’s birthday, father’s day, for the last two years we’ve had a daughter graduating from high school, well you’re getting the picture.  Thankfully my wife loves everything about gifts, thinking of what to give, shopping for them, buying them, wrapping them, and most of all giving them – but alas, that also means she loves receiving them, which puts me at the mall in June as well.  It seems every store has a special deal, 20% off your purchase that day and every 5th tuesday of the month when there’s a full moon for the rest of your life.  But I caution you, if you are in the midst of applying for a home loan, do not change your credit status in any way, no matter how insignificant it may seem.  From the day you make loan application for your new home until closing, maintain credit homeostasis!  Anything from a new GAP credit card to a car loan to an increase in the balance on your existing credit cards can delay or disqualify your loan application.  Effective June 1st, the Loan Quality Initiative requires lenders to track changed in borrower circumstances between application and closing, and frequently underwriters re-check credit at the eleventh hour to make sure nothing has changed since the time of application.  These aren’t necessarily new rules, but with the recent mortgae crisis, they are being enforced more consistently and scrutiny is certainly heightened.  This is also true of any kind of job change during the same period of time.  So, no matter how good the deal at the mall sounds, pass it up if you’re waiting for your home loan to close – it isn’t worth the delay or worse yet, not qualifying.

Advertisement