In our office we have an in house lender who shares trends on our change by the hour mortgage industry. Recently she mentioned how quickly news can get out about you applying for a mortgage and how it can end up costing you in the end if you act casually. I thought I’d share.
The story was regarding a client that she had who applied for a loan and was approved to buy a home. The buyers credit score was above 700 and was good to go. The buyer’s agent advised the buyer to shop around to have his buyer get the best rate. The buyer did shop around but ultimately allowed much time to pass by. After analyzing the loan offers, the buyer found that the original approval had the best offer. Meanwhile, the credit bureaus notified collections agencies that the buyer had applied for new credit, collections then reactivated claims to the agencies, and their credit scored plummeted to the 660’s. The buyer was then faced with a higher second lien rate which was originally at 7.5% to a disheartening 9.5% by the time he was in a contract to buy a home.
The impact could mean the difference between buying now or having to rent longer if the buyers credit was marginal.
This was a case that the buyer did take a long period of time. Typically if a buyer acts timely this may not be a factor.
The advice?
First and foremost monitor you credit and check your credit 6 months ahead of your plan to purchase. There are a lot of changes and knowing where you stand ahead of time can make secure your stake in being able to buy or not. Here you can also make sure that those old collection demons can be taken care of once and for all.
If you are approved comparison shop for a lender quickly and do not let your credit report expire. If you do let the report expire, you could end up seeing a dip in your score and it could be the difference in rate or being able to buy. You have about 90 days to get a loan and buy a house until your report expires. Use that time wisely.
So if you are able to get a loan initially, remember the credit bureaus will and do kiss and tell. Act!
For more information regarding your credit simply e mail me or call me at 512-744-4553.
RE/MAX Capital City
Tags: Austin, Austin Real Estate, Buyer Advice, Collection Agencies, Credit, FICO score, lending, Mortgage Loans, REMAX, REMAX Capital City
