credit

Beware: Lenders will add an extra step before close of escrow.

You are in escrow? Don’t apply for any new credit!

You have been seaching for months to find your deam home in a decent location and you think you have it in the bag, having outbid multiple offers along the way and you are now safely in escrow. Everything is going great, you are a few weeks away from closing and you are already shopping around for all of the home furnishings you will need to buy but, hold on! According to the Los Angeles Times, lenders will now order a new credit report just before the close of escrow, effective beginning of June.

Why? It seems that Fannie Mae wants to crack down on buyers who max out their the credit card while about to buy a property. If you purchase big ticket items on credit during your escrow period, understand that the purchases could jeopardize your lending ratio and throw off your application. And we all know how tight banks are today with their money.

So, if you are tempted by a new car to commute between your work and your new house, think twice. Be patient and wait that escrow has closed. Then you can go and have fun enjoying your place.