New last minute credit report on Fannie Mae home loans

Posted: June 1st, 2010 | Author: admin | Filed under: Credit Advice, Purchase Loans | No Comments »

Ok–we are going back to credit basics on this post.  Fannie Mae just announced the lenders funding the loan will be pulling a last minute credit check.  Similar to a verbal verification of employment to make sure you are still working when you get your mortgage the banks will make sure you haven’t opened up any new debts that could adversely affect your ability to repay.

So what does this mean?  Read on carefully for all the details but in a nutshell, if you are applying for a mortgage loan in Minnesota (or anywhere else) DO NOT buy a new car or take out ANY other type of consumer debt.  EVEN for furniture. 

1) Three months prior to securing your mortgage, DON’T apply for, close, or pay off any credit cards, loans, or other kinds of credit without speaking to your mortgage professional first. Any one of these actions, as innocent as they might seem, could seriously affect your credit score, adding significant costs to your mortgage should your score suddenly drop.

2) If you have a credit card account with an excellent credit history, DO use it – but use it strategically. In other words, use it only for small purchases that you can easily pay off completely at the end of the month. Remember, creditors like to see evidence of stability, so the goal here is to keep the good reports coming month to month without falling into the same financial traps that led to credit challenges in the past.

3) If you don’t have a credit card, DO get a secured credit card. This is a great way to rebuild or establish credit quickly. Because this account is secured by funds that you deposit (typically between $100 and $400) you’re not seen as a great risk to the card issuer because of your initial investment. Again, use this card strategically to build a strong credit history. Pay your bill on time every month, and it won’t be long before you qualify for an unsecured credit account.

4) Finally, DO monitor your credit. Ask your mortgage professional to refer you to a professional credit repair company you can trust. Having an experienced professional on your side will allow you to focus on your long-term credit goals without having to make reestablishing your credit a second career.

 

If you or anyone you know has any questions about credit scores or what can be done to repair them, please don’t hesitate to call me at 651.210.9593. We’ll be glad to review your credit and see what, if anything, needs to be done to help meet your financial goals and needs

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