July 29th, 2016 5:05 AM by Jackie A. Graves
a lender to delay or even cancel your mortgage closing? Then change your
"borrower circumstances" between the day you apply for and the day
you close a home loan.
have gotten stricter in response to the mortgage meltdown a few years ago.
Fannie Mae's Loan Quality Initiative, which went into effect in 2010,
requires lenders to track "changes in borrower circumstances" between
application and closing.
borrowers, the Fannie Mae rules mean certain actions are likely to delay or
otherwise mess up a mortgage closing.
change in circumstance could affect and delay a borrower's closing on a
transaction," says David Adamo, CEO of Luxury Mortgage of Stamford,
are three things borrowers can do to mess up their next mortgage closing.
you want to implode your impending mortgage, get a new credit card or auto
have long admonished mortgage applicants to avoid getting new credit cards and
auto loans while home loans are in underwriting.
example, picture a borrower who gets a car loan a week before closing on the
mortgage. The mortgage lender doesn't know about it. Later, the borrower misses
a couple of mortgage payments.
Mae can look back, discover the undisclosed auto loan and make the lender buy
back the bad mortgage. That's a money loser for the lender.
at the eleventh hour, most lenders check credit for new accounts.
merely opening an account -- without charging anything to it -- can be a
often offer discounts to customers who apply for store credit, Adamo says.
"That is something that most consumers will take advantage of, and even
something as benign as that could affect a borrower's ability to close on a
up credit cards with thousands of dollars' worth of appliances, tools and yard
equipment is another surefire way to muck up a closing. It's best to leave
those cards alone.
increase your credit card balances at all. Consider paying cash for
everything," says Dan Green, publisher of The Mortgage Reports.
approval is based partly on debt-to-income ratio.
The lender looks at the borrower's minimum monthly debt payments and compares
them with income. If the ratio of debt payments to income is too high, the
borrower could be turned down for a mortgage.
encourages mortgage lenders to recalculate debt-to-income ratios just before
closing. If a spending spree sends the debt-to-income ratio too high, the
mortgage could be doomed. For this reason, borrowers should wait until after
closing the mortgage to buy furniture, a refrigerator or a lawn mower
jobs is another good way to derail a mortgage before closing. Other potential
deal breakers include staying with a current employer, but switching from a
salaried position to one where primary income comes from commissions or
the rules about any job change, especially if you go to commission or bonus,
usually you need a two-year history," says Bob Walters, chief economist
for Quicken Loans. "So if all of a sudden you switch from W-2 to some
other kind of compensation, and you don't have the history, a lot of times that
income can't be included. So all of a sudden you'll find maybe you don't