How To Kill Your Mortgage Before Settlement Day
Mortgages are becoming harder to acquire as financial institutions tighten their credit requirements. Fannie Mae has a loan quality initiative that most lenders will start to follow. This will only serve to put more pressure on those trying to acquire mortgages. In fact, under this initiative, those who have been approved for a mortgage may find it pulled on settlement day.
One of the processes that will be undertaken is a follow up credit report just prior to settlement. For many home buyers, the trap is in obtaining more credit after having the mortgage approved – and many do. Once the wheeling and dealing has been done, the price settled, the mortgage in place, buyers often then look to the house itself. New furniture or electrical appliances, perhaps a short holiday prior to the move, and all paid for by credit.
One word of advice – don’t do it. At least, wait until after settlement when you have the keys in your hand – then, if you really need to go on a shopping spree, it’s your money and your credit.
For many, it will be an unfortunate set of events. Even though they are remaining inside their commitment affordability, there is a real chance of having their mortgage pulled prior to settlement. If you are considering buying, just remember that a mortgage is not confirmed until settlement – don’t kill your mortgage before that big day!
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