When you apply for a home loan, you know you need to have good credit and a low debt-to-income ration. Unfortunately, many people think that once they pass muster at approval, that’s all there is to it. They make the mistake of running out and charging more on their credit cards or getting a large consumer loan, like for a car.
The bad news: Some mortgage lenders double-check your credit score and history before closing. Inman News reports on this practice:
What many borrowers don’t realize is that the
lender may take another financial snapshot of their lives just before
the closing. The second pull of your credit history and credit score
could come any time within a week or two of your scheduled closing date.
Be aware that mortgage approval isn’t the end of the process. It can take up to a month or more after approval for closing, and your mortgage lender may want to make sure that you are still capable of making the mortgage payments as the time draws near. And, with concerns over the subprime lending crash, as well further credit crunch issues, this practice may become even more popular in the future.
In order to avoid a nasty surprise between approval and closing, avoid new loans and keep away from the credit cards.