Second Credit Checks for Home Buyers: Be Prepared SPONSORSHIP


In today's real estate climate, getting a pre-approval on a loan doesn't mean you can kick back and go on a shopping spree to furnish your soon-to-be dream house. With stricter regulations mandating a further credit probe before borrowers close their mortgage, real estate experts are advising prospective home shoppers to keep their financial situation static until the deal is finalized.

Starting June 1, Fannie Mae has a new rule going into effect which requires the lender to check for additional lines of credit, such as a new credit card or a car lease, that a borrower may have obtained that have not been reflected on the credit report over the course of the loan process.

According to Keith Stewart, a mortgage broker with Northpoint Lending Group, Inc., the directive enforces more accountability on the part of the lender, but it isn't an entirely new mode of operation. "When I pull the credit for my clients, I tell them we are going to get approved on a financial snapshot," says Stewart. "We don't want to change that until we close."

In light of the new regulation, we talked to a pool of mortgage brokers, who shared tips on dodging mortgage closing debacles and streamlining the process.

Originally published