Paul Wakefield, a Senior Loan Office at V.I.P. Mortgage Inc., emails me a monthly newsletter. Sometimes the tips are so timely, like this one below:
Top 10 Credit Don’ts During the Loan Process
Many are taking advantage of interest rates at historic lows, either by re-structuring debt with a refinance or purchasing a new home. However, the recent economic crisis has created even tougher guidelines and credit requirements and there are some things that consumers must be aware of when applying for a loan.
Leading nationwide credit expert and President of Credit Resource Corporation, Linda Ferrari, developed the top 10 credit don’ts during the loan process, to help you get your arms around those things that can unknowingly wreak havoc on your loan transaction.
1. Don’t do anything that will cause a red flag to be raised by the scoring system
2. Don’t apply for new credit of any kind
3. Don’t pay off collections or charge offs
4. Don’t max out or over charge on your credit card accounts
5. Don’t consolidate your debt onto 1 or 2 credit cards
6. Don’t close credit card accounts
7. Don’t pay late
8. Don’t allow any accounts to run past due-even one day!
9. Don’t dispute anything on your credit report
10. Don’t lose contact with your mortgage and real estate professionals
This is excellent advice for any buyer, and even more important for home buyers involved in a short sale transaction. It does take some additional attention to keep your finances in perfect order for the 6-8 months it may take to close on a short sale. The last thing you want to happen is fail to qualify for a loan because of a delayed payment or large purchase made during the extend wait. Keep in touch with your loan officer, and be sure to ask questions about any type of financial transaction that you think might impact your ability to buy a home.
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