home purchasing and bank decisions?

Question

I am buying a home and escrow closes in 3 days. My worry is everyone is telling me that it is not a done deal because the bank will run a credit check one day before escrow closes. My question is i recently asked for a loan to consolidate my bills will this change the banks decision on giving me the loan that i need to purchase my home.

I was prequalified and signed the papers saying how much my interest rate is and what my payment will be I'm just not sure if the bank could reject my loan.

Answer 1

Typically most banks will not update your credit report, especially if it is under 30 to 60 days old.

If you received a loan to consolidate your bills, and this issue does arise, the answer is yes this can affect your financing... even if you have received a commitment.

But, if you have not used the new loan, and do not owe any money or have any payment associated with the new loan, there is a good chance that even then this will not affect your mortgage.

If you have begun to consolidate your accounts, new payoffs might have to be ordered to show that you are using this money for debt consolidation. The biggest issue from the lending side is how this affects your Debt-to-Income ratios, you don't want these to increase negatively.

If you have received a commitment, or approval, you will notice there is language that talks about changes in your credit and income situation... so they would apply.

Essentially, you did not want to consolidate debt until your mortgage was closed. Now that is done, don't worry, you can still get out of it should it arise. More than likely, although this can affect your financing, it will not alter your current loan situation.

Answer 2

As you have heard previously that was not a well calculated move. even worse this is not a question you should have to ask becuase a good loan officer would have continually reittereated to you not to do anything that would negativelly affect your credit.
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Answer 3

I doubt it. I am pretty sure the bank runs a credit check before you become prequalified. Why would the bank go through all of the work, and then found out the buyer has no way to repay the loan.

Answer 4

Look through your bank papers and talk to your loan officer. There should be a "loan commitment letter" saying the the bank has agreed and obligated to lend you the money. That should happen usually a week, two weeks before closing. If you have that, you are home free.

Answer 5

You didn't get a mortgage pre-approved before you put an offer on the house?

if the bank DECLINES your loan because they have not run a credit check on you, then you don't have a house.

You should have had the mortgage lined up WAY before now. I can't believe the seller sold to you in this condition?

The bank could decline your loan, or hike up your interest rate if you didn't lock in your mortgage by now.

Answer 6

This is a typical dumb move that many borrowers make. When you have a loan in progress, you should never do anything (i.e. make a purchase etc) that will affect your financial condition. You better hope the bank does not catch wind of it because they would have to run your D/I analysis to make sure it has not changed.

Answer 7

Yes, they will most likely pull credit again. And yes, it could possibly affect your approval. Never, ever apply for any type of credit in the middle of a mortgage application.