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Established Member
scoreclimber
Posts: 23
Registered: ‎09-25-2007
0

Closing in 2 weeks

Hi everyone!  I spent some time reading these forums (and posting a little bit) a few months ago when I was trying to increase my credit score to apply for a mortgage.  Fast forward to today, we sold our house, found a new one and are closing on both houses in 2 weeks.  When we were preapproved for our mortgage, my scores were all above 620, and we just locked our interest rate last week.  It's a bit higher than I would have liked (6.85%) but we figure we can refinance in a year or two when my score hits 700+. 
 
Now I get an alert on myfico that my equifax score (which has always been my lowest) dropped to 598 - only reason given is that I 'may have moved to a different category', blah blah blah.  In other words, I've been rebucketed!  Nothing else on my report has changed and I have been obsessive about paying on time, keeping utilization low, etc. 
 
I have been told by my realtor that they will re-check my credit 3 days before closing.  My question is - if my score is still 598 when they recheck, will that affect my interest rate since we've already locked in?  Or do they just do a general check to make sure there are no major changes/purchases since getting pre-approved?  I am terrified that at the recheck I'll no longer be about 620 and it will compltely derail our loan!
 
Any thoughts on this would be greatly appreciated!  BTW, everything else for our application is great - low DTI, putting 20% down, partner's credit score is near perfect, good employment history, etc.
 
Thanks!
 
 
Contributor
foles28269
Posts: 114
Registered: ‎04-21-2008
0

Re: Closing in 2 weeks

Is that an FHA rate?...Were you approved via Automated Underwriting?
Established Member
scoreclimber
Posts: 23
Registered: ‎09-25-2007
0

Re: Closing in 2 weeks

It is a conventional rate.  I think we were pre-approved via automated underwriting since I got the preapproval right after sending all of our info in.
Valued Contributor
slyhouse08
Posts: 2,340
Registered: ‎04-08-2008
0

Re: Closing in 2 weeks

If I were you I would buy a new score...I got an alert on Saturday saying my score from 29 pts...and there was no explanation...scorewatch is slow...and has a lot of flaws...when I bought my score...it actually had increase by +8 pts...instead of decreasing...
Established Member
Mslewis1999
Posts: 38
Registered: ‎01-03-2008
0

Re: Closing in 2 weeks

The same thing happened to me on Thursday.  It said my score dropped 16 points for no reason. 
Super Contributor
ShanetheMortgageMan
Posts: 7,964
Registered: ‎09-28-2007
0

Re: Closing in 2 weeks



scoreclimber wrote:
I have been told by my realtor that they will re-check my credit 3 days before closing.  My question is - if my score is still 598 when they recheck, will that affect my interest rate since we've already locked in?  Or do they just do a general check to make sure there are no major changes/purchases since getting pre-approved?  I am terrified that at the recheck I'll no longer be about 620 and it will compltely derail our loan!
 
Any thoughts on this would be greatly appreciated!  BTW, everything else for our application is great - low DTI, putting 20% down, partner's credit score is near perfect, good employment history, etc.
 
Thanks!

Is your realtor also your loan officer?  If not, then I'd talk to your loan officer about what the lender will be doing, as your real estate agent is the source of information for the real estate transaction, and your loan officer is your source of information for the mortgage transaction.
 
If the lender does indeed re-check credit again, then your new scores would play into the approval you'd get - and depending on the loan program you could have an issue.  With conventional conforming financing, a FICO score under 620 has a bigger interest rate adjustment than a FICO score of 620.  Did you look into FHA financing at all?  You should be able to get a much lower rate than  you are currently being offered if you go with FHA... also, refinancing later for a lower rate is never guaranteed.  Rates could go up by then, and then your 6.875% would look pretty good compared to the options at that point.

How much are you putting down?
Established Member
scoreclimber
Posts: 23
Registered: ‎09-25-2007
0

Re: Closing in 2 weeks

Thanks for the input!  I took your advice and ordered new scores – I ordered all 3 since I had a free score power report and found a promo code for 25% off.  As of today my scores are:  EQ 626   EX 634   TU 647.  So I feel much better!  I also discovered since I got all 3 reports that the mortgage broker pulled the scores again on 4/23 when I sent him all the info on the new house.  (This could be because our closing will actually be a week after our preapproval runs out).   I sent him an email asking if the scores would be pulled again before closing.  We’re curious about this anyway since we have to buy appliances and will probably charge them to a 0% Lowe’s or HD card.  We can certainly wait until the day before closing to do this but it’ll be good to know.

Shanethemortgageman – Great advice!  And of course it makes perfect sense to get mortgage info from the mortgage broker and not the real estate agent.  My brain is on overload these days :smileyhappy:.  And I do know rates are not guaranteed to go down or even stay the same – I figure once my score is up, if and when we could get a better rate refinancing might be an option.  We’re fine with the payment as it stands right now so there won’t be any rush to re-fi.  And we’re putting 20% down.  I guess we didn’t look at FHA since we qualified for conventional, but maybe I should ask the broker about this if we could get a better rate. 

Thanks again everyone!


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