We just applied for a loan on a new house. They ran our credit and that is good.Will they run it again before we close on the loan?
2006-09-11 05:33:52 · 8 answers · asked by stephanie s 1 in Business & Finance ➔ Renting & Real Estate
No They Shouldn't If They Do, You Should Look Into It Further. I Think It's Illegal.
2006-09-11 05:35:21 · answer #1 · answered by Summer 2 · 0⤊ 0⤋
Yes, they will run it a second time in most cases. If you're working with a Broker, you can be certain that this will be the case.
Avoid Changes to Your Financial Profile During the Loan Process
Once your loan package has been sent to the lender, there are a number of things you should avoid doing that will change your financial picture. Remember, the lender is looking for stability and consistency. If you want the best interest rate, keep that in mind. Here are a few things to consider:
The lender is looking to see what your source of down payment is.
Your lender will most likely ask you to provide proof of your liquid assets. This includes bank statements for checking and savings accounts, verification of investments, and any other liquid assets. Some of the things they ask for may seem trivial, but keep in mind, if you are planning a move to a new home, it's important to have all documentation readily available. If the lender asks for cancelled checks or deposit receipts to meet certain conditions, you want to be able to find these things quickly to avoid delaying the closing of your loan. Make sure your paper trail is easy to document, and don't move money from one account to another.
Major purchases tip the scales against your favor.
Avoid making any major purchases. You might be thinking about purchasing new appliances for the new home. This is not the time to do it. Avoid making any major purchases on jewelry, appliances, furniture, vacations, or anything with a significant price tag.
Buying or leasing a car can make a negative impact on the way the lender views your financial status. This is a big ticket item that dramatically affects your debt-to-income ratio. You may feel you have room in your budget to purchase a new car, and think this is a worthy investment if you are looking for a home that will mean a longer commute for you on a daily basis. But by tacking a car payment onto your existing debt, you reduce the amount that you will qualify for in a home loan. A $400 a month car payment can reduce your approved loan limit by as much as $50,000. Think about doing this after your loan is approved if you really need it.
If you have to change jobs, you may be asked to document why this change occurred.
If you are changing jobs to increase your income, that's a no-brainer for the lender. If you have an erratic work history to start with, another job change may make it look worse for you.
If you are an hourly wage employee, most likely a job change will have no effect on your ability to qualify for a loan. If you have a track record of a consistent amount of overtime or consistent bonuses over the last two years, the lender views this favorably. If you change jobs, there is no way of knowing if the new employer will pay overtime. Many do not! If you work on a salary + commission or straight commission basis, it has a dramatic effect on your stability. If you are considering starting your own business, again, this is something to consider after your loan is funded.
Call me directly for a free consultation. If you have any further questions. Also, here is a link to a Free report which will detail some costs that might not have been disclosed - http://www.freerealestatesecretssoutherncalifornia.com/home_buyer.aspx
2006-09-11 20:51:20 · answer #2 · answered by Darren Meade 2 · 0⤊ 0⤋
Hello Stephanie,
The true answer is that it depends on the type of program and the investor. Some investors will pull your report the day before closing as a QC (Quality Control); however, most do not. Other investors may pull a separate report if your mortgage professional uses a different reporting company (i.e. Kroll Factual Data vs. Landsafe).
The other answers about lenders repulling reports due to a time lag are correct. You are permitted 120 days to close a loan after credit is pulled (or 180 if it's new construction).
My recommendation is keep doing what you're doing. If you already have good credit then you are doing fine. Ask your mortgage professional is he or she anticipates the lender repulling your credit. I personally submit my loans to investors that typically do not repull a credit report for the reasons that you never know what can happen in 30 days.
Please contact me if you have any additional questions or concerns.
2006-09-11 07:51:43 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Let me break this down simply since I've seen a ton of convoluted answers.
If you use a broker, they will run your credit, and then the lender they submit the deal to will run your credit. If your credit package expires, meaning if you submit the loan, and the deal doesn't close within 60 days (depends on bank or lender), they will pull another credit report.
If you go to a bank directly, they will pull one credit report. Again, if the credit package expires, (timeframe can vary by bank), another report will likely need to be pulled.
If you use services that compare rates of several banks like lendingtree.com, they may use several lenders all at the same time, causing multiple credit reports to be pulled. This has been highly scrutinized practice as it can hurt your credit score based on the high number of credit inquiries from lenders.
So to sum it up, usually only one credit report should be pulled with a bank, and two if using a broker. More if using a comparable service like Lending Tree. And if your original credit package expires, an additional report will need to be ordered.
Banks and lenders only order additional reports to cover themselves if you happen to open a bunch of new credit accounts during your application process, as this increases your risk as a borrower.
The key to avoid any problems is before and during the application, DO NOT apply for any new credit and pay everything on time, no questions asked.
For more information, check out:
http://www.thetruthaboutmortgage.com
2006-09-14 09:11:27 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Only if their is a long lag between the initial application and the closing. Otherwise no. And once you are all set and if you are a excellent customer and pay on-time you will actually go through a couple mortgage companies if not more through the entire loan. Other mortgage Co. will bid for your loan and buy it from your current company, they will make you aware if this happens, don't worry. But this is only based on excellent loan paying history. Even then they shouldn't run your credit report.
2006-09-11 05:41:31 · answer #5 · answered by Mickey 2 · 0⤊ 0⤋
I am a real estate agent, so I have had this question asked a lot. Yes they can run it again, if the time frame is long. If you apply for a loan, and it closes within a months time , no they shouldn't run your credit, as long as they told you at the begining that it was fine. But if it takes longer than a month to get your loan closed they might have to run it again. But if your credit score is good, them running it one more time shouldn't hurt you. Hope this helps :)
2006-09-11 05:42:46 · answer #6 · answered by sunshines_in_da_room 2 · 0⤊ 0⤋
Generally they run it the day before closing to make sure you haven't taken out any large loans 'recently'. I've heard of lenders running it as many as 3 or 4 times before closing.
2006-09-11 06:51:12 · answer #7 · answered by Laquishacashaunette 4 · 0⤊ 0⤋
If there is a long gap in between now and when you actually close. Yes they may run it again.
2006-09-11 05:36:22 · answer #8 · answered by to_sassy4_u 5 · 0⤊ 0⤋