Can a mortgage be cancelled a couple of days before the closing date?

Question

I just financed a car and am worried the bank will stop my mortgage if they do another credit check.I had to get a car because my job will be a fair distance away and the closing date is next week. Anyone give their opinion?

Answer 1

Once a deal is closed, teh only action that will undo the r/ship is a failure to make the payment.

The car is not a problem SO LONG AS THE LOAN HAS ALREADY CLOSED. and the loan proceeds advanced However, keep in mind that if you do refinance in the near future or buy another property, then the car will be on your credit report.

Answer 2

It is not at all unusual for a lender to do a final credit update prior to funding a loan. Even if the new loan doesn't show up, the inquiry by the party financing the car will and you may be required to give a written explanation of the inquiry and confirm whether or not that inquiry resulted in a new obligation. To lie about that is loan fraud.

You should tell your loan officer about the new debt IMMEDIATELY. If the new payment does not impact your ability to qualify for the mortgage financing, no big deal. If it does, perhaps a change in loan type will solve it. If this payment precludes your qualifying, sorry 'bout that, you just fell into a big mortgage financing pothole. Never do anything to alter your debt picture when in the middle of getting financed. If it precludes your financing and your loan officer doesn't do anything about it, you're both guilty of loan fraud which may get picked up in post closing audit. If that happens the loan may be called due and payable in full.

Answer 3

First of all, your loan officer should be smacked around a bit for not telling you to NOT buy anything until after you closed your home loan.

If you do not tell your loan officer, you are guilty of fraud. When you are signing your closing documents, you will sign an affidavit swearing that your financial situation has not changed since the application. It has. You changed it by taking on a new loan.

All mortgages are subject to audit and fraud reviews. The first thing that they do is run a new credit report, make sure it matches with the one that was used to close your loan. It can and likely will be discovered at some point.

Mortgage fraud is a federal crime. Federal prisons are no picnic. And the Feds are cracking down hard on mortgage fraud these days.

Tell your loan officer. Maybe you can still qualify, maybe at a higher rate.

Answer 4

At Closing, you will probably be presented with a document whereby you state under oath that there have been no significant changes to your finances as they appear on the credit report, a copy of which you will be given.

If you do sign that without telling them, you are potentially liable for failure to disclose a material fact. It is possible that the change is significant enough that, had they known, they would have issued the loan at a higher interest rate, or not at all.

That can become a problem, because it may be justification enough to be a default under the mortgage, triggering Acceleration of the entire principal balance.

Either the purchase is significant to them or it isn't. If it isn't, there's no harm in telling them now, if it is, better to find out the remedy now than later.

Answer 5

This depends on a few things.

1) Does the lender in question require they run their own report prior to funding. This does happen at some lenders as a means of preventing loan fraud.

2) When was the first report run? If it was close to 60 days there is a good chance they would run a new report...if there were credit exceptions by the underwritier they may even run it again if the report was 30 days old....if the monthly activity leads them to suspect you may not qualify.

I write a blog on the subject of credit management, mortgages, real estate trends, etc. Check it out for more information that may be helpful.

Answer 6

I hate to tell you this but you have committed a cardinal sin for your mortgage professional. There is a major possiblity the bank could change the parameters or eject the loan for two major reasons. 1) The purchase of the car has now added a financial obligation which was not originally there when the mortgage company qualified you. This payment potential may change you DTI (debt to income) ratio. which means according to the bank you may no longer be able to afford the payment in which they gave you. 2) this may also change your credit scores. lowering of your scores may make you inelligable for the program which you were originally qualified for also. Although there is no garauntee that they will cnacel you loan there is a major possiblity. I have had several clients do the same exact thing (which I had secificaly gave them instructions not to) and then not qualify for loans because of their actions. If they reject you loan you may have to requalify for another program or with another bank. Feel free to log onto my company site http://www.justgetaloan.net/ if you need additional information or need to re-qualify we have over 100 banks waiting to give you the loan of your needs. If you would like further assistance feel free to contact me at 866 530 7300 ext 7305 or email me Jenold Freeman at [e-mail]

Answer 7

It might be dependent on the laws of your state.

Where I live, you are issued a commitment letter from the mortgage co (bank, whatever) and it is based on info at time of application. If your ratios change before closing, they could technically revoke the commitment letter citing change of financial condition.

Hope this helps......

Answer 8

A mortgage can be stopped at any point up to when you have actually exchanged on the property xx

Answer 9

Most Mortgages have an out something like this. written like this I hope this helps

AGREEMENT FOR PURCHASE AND SALE OF REAL ESTATE

THIS AGREEMENT is entered into this day of ,
19 , by and between ,
(hereinafter referred to as "Seller"), whose address is
, and , (hereinafter

referred to as "Buyer"), whose address is

The parties hereby agree that Seller shall sell to Buyer or Buyer's Assigns and Buyer or Buyer's Assigns shall buy the following described real property upon the following terms and conditions:

1. Description.

(a) Legal description of real estate (hereinafter referred to as "Property"), located in the County of , State of .

SEE ATTACHED EXHIBIT "A"

(b) Street address of the property: .

(c) Personal property included:

2. Purchase Price. $

Payment:
(a) Deposit to be held in escrow

by

(b) Subject to an assumption of a mortgage in favor of


with interest thereon at the


rate % per annum and payable in monthly installments of $ with an approximate


balance of


(c) Purchase money mortgage and

note with interest thereon at % on terms set forth

in Exhibit "B" attached hereto,

in the principal amount of

(d) Balance to close in cash or


certified or cashier's check, subject to prorations and


adjustments
Total $

3. Financing.

(a) New Financing. If any part of the purchase price is to be financed by a third party, this Agreement for Sale and Purchase is conditioned upon the Buyer obtaining a firm commitment for said loan

within days from the date of this Agreement, at an interest rate not to exceed %, with a term of years, and in a principal amount of not less than $ . Buyer agrees to make application for and to use reasonable diligence to obtain said loan. Should Buyer fail to obtain same or to waive Buyer's rights hereunder within

said time, either party may cancel this Agreement.

(b) Existing Mortgage. Seller shall furnish a

statement from the mortgagee setting forth there principal balance, method of payment, interest

rate and whether the mortgage is in good standing. If a mortgage requires approval of Buyer by the mortgagee, and the mortgagee does not approve Buyer, Buyer may rescind this Agreement; or if

the mortgagee requires an increase in there

interest rate or charges a fee for any reason in excess of $100.00, Buyer may rescind this Agreement unless Seller elects to pay such increase or excess. Seller an Buyer shall each pay 50% of any such fee not in excess of $100.00. Buyer shall use reasonable diligence to obtain approval. The amount of any escrow deposits held by mortgagee shall be credited to Seller.

Answer 10

Usually, each business give us three working days, that you have a chance to cancel. So if you've changed you mind, then you better do it within the three days !!