Mortgage Loans

[BIRDWRITER]

Hi all,

DH and I are building a new house, and scheduled to close June 8th. We are going FHA (5% down) because we decided to keep and rent our old house rather than sell underwater. We have been approved, and everthing seems good to go. My question is this: when is it safe to apply for new credit for furniture and stuff? We will not be moving our old bedroom set, and have a new one on layaway. Since we will be sleeping on the floor at the new house until we can get the bedroom set delivered, I obviously want to do it quickly. Can we walk out of closing (keys in hand) and head straight to the furniture store, or must we wait a certain amount of days for the loan to fully fund?

thanks!

[Watchmann]

Once the loan is funded and the keys are tossed to you you are golden.  I wouldn't apply for any new credit until the keys are in hand on closing day.

[tasharn]

I want new furniture as well. I'm set to close before the end of May. To be safe, I'm going to wait until I'm funded before I start applying. I've read about people being denied at the last minute (even with keys in hand).

[webhopper]

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Watchmann wrote:

Once the loan is funded and the keys are tossed to you you are golden.  I wouldn't apply for any new credit until the keys are in hand on closing day.

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Bad advice...  I wouldn't apply for new credit until 30 days after closing...  Some mortgages get audited after closing.  If your material circumstances change after closing, you may have to hand back the keys...  In my honest opinion, you may be better off sleeping on an air mattress for 30 days after closing, rather than risk having to hand back the keys.

[BIRDWRITER]

Wow, that could really happen? I though I heard once that it takes something like 3 days for a mortgage to fund after closing, but after all that you're home clear. Is it really 30 days?

[webhopper]

ya, someone on this forum posted an experience about having to hand back keys...   its rare but it does happen. 

Basically Fannie and Freddie require each mortgage to be audited before it gets sold to them... if the mortgage doesn't pass the audit, then the loan won't get sold, and the lender would rescind the mortgage rather than hold it in-house.   each mortgage remains a liability for the lender until it gets passed down the pipeline to Fannie mae or Freddie mac, or Ginnie Mae for FHA and VA loans.

Edit:  Ginnie Mae doesn't actually buy them, she just provides the insurance for them.

[BIRDWRITER]

Dang! But after 30 days it would be safe?

[Booner72]

I am a person who had to give back keys, but the loan had not funded.

Once it FUNDS and your  title is recorded in YOUR NAME, then it is your house, legally.    FHA DOES do audits, but that doesn't mean they are auditing whether or not someone should have been approved.

You can happily and worry free get your furniture, but not after closing unless it is "TABLE FUNDING".

Good Luck!

ETA:  This is why you go through so much hell at underwriting.  To make sure the loan will be funded and stand up.

[frogfan12]

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Booner72 wrote:

I am a person who had to give back keys, but the loan had not funded.

Once it FUNDS and your  title is recorded in YOUR NAME, then it is your house, legally.    FHA DOES do audits, but that doesn't mean they are auditing whether or not someone should have been approved.

You can happily and worry free get your furniture, but not after closing unless it is "TABLE FUNDING".

Good Luck!

ETA:  This is why you go through so much hell at underwriting.  To make sure the loan will be funded and stand up.

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Sad day! I was scared that my loan would not fund because the seller was "short" despite not paying any closing costs for me. 

[boomhower]

You are fine once the loan is funded and everything is recorded in your name.  Funding usually takes place in a couple of days.  I'd say a week your safe.  Once they fund the loan it's funded, they can't pull it back them unless there was something wrong with it.  They change their mind after the transaction has been completed just because they can't sell it to someone else.