Sunday, June 23, 2013

After the Mortgage Approval, Before the Close ... FREEZE!

Don't Apply for or Accept ANY New Loans, Credit Cards, Financing, Car Loans, Anything During the Mortgage Process

You might think that the NSA is spying on you, but you can be sure that the bank or mortgage lender is.  Lenders are super skittish under the new rules from Fanny May and Freddie Mac, not to mention potential additional rules coming from Dodd Frank, and changes in underwriting standards from FHA.  These all add up to a potential disaster for your plan to get into a new home or refinance your current loan.

We highly recommend that you plan for any new mortgage month in advance.  You may want to change the way that you take income or count deductions on your taxes.  You may want to pay off debt or eliminate credit cards.  You will certainly want to clear up any issues on your credit report.

But now you are only weeks away from getting serious about shopping for a mortgage.  From this moment forward until the mortgage is signed, DON'T do anything that might make it appear that you are adding to indebtedness or even potential indebtedness.
  • Don't apply for new credit cards even if the department store will give you 10% off on all your purchases.
  • Don't agree to increases in your credit card available credit
  • Don't make a large purchase on any of your credit lines
  • Don't take a cash advance against any of your credit cards or other lines of credit
  • Don't even set up a no bounce account on your checking account
  • Don't buy a car or refinance a car 
  • Don't cosign for your kids on any loan or property rental
Prior to approval, the lender will be looking for your current debt to income ratio and what that ratio will be after the approval.  They will also be looking at your ability to repay the debt in great detail.  The new rules require lenders to be sure you have the ability to repay.

After loan approval and prior to getting your final signature, the lender will have you under scrutiny.  Just prior to drawing up the documents, there will be a final check to see if there has been any new activity that might throw off all these delicate measures of your credit worthiness and your ability to repay the loan.

So be smart!  Just play freeze for the few weeks leading up to your application for a mortgage, and then for the additional few weeks during the process of closing.  

If you are looking for a mortgage refinance in Santa Monica, please give us a call.

New Contact Information for Bill Rayman

Bill Rayman Home Mortgage

12121 Wilshire Blvd
Suite 350
LA CA 90025



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