topic Re: Rapid Re-Score Question (Loan Officers please chime-in) in Mortgage Loans

Rapid Re-Score Question (Loan Officers please chime-in)

Anonymous — Tue, 01 Sep 2009 19:43:08 GMT

If a Rapid Re-Score is performed, is the Loan Officer able to determine your current credit account balances or just your credit account balances that were last reported to the CRA's?

The reason I ask is that my current credit account balances are a little higher than my last reported account balances. So, I'm wondering if I need to pay them down before I close on my house?

FYI, my closing date will occur before these account balances are reported to the CRA's again by my creditors.

Any help would be appreciated.

Message Edited by schlebrock on 09-01-2009 12:43 PM

Re: Rapid Re-Score Question (Loan Officers please chime-in)

ShanetheMortgageMan — Tue, 01 Sep 2009 21:13:14 GMT

When a rapid rescore is done, the information that you need updated is updated on the credit bureau level. Afterwards, in order for the loan officer to get the results, a new credit check is done. Whatever the balances are when the new credit check is performed is what will be listed on the new credit report, as well as the scores that result from the balances being where they are at. If the account balances are too high now, meaning that the payments on the credit card balances have increased, therefore pushing your debt to income ratio too high in order to qualify, then you have the opportunity of paying them down before closing, providing a new statement showing the new payment, and re-qualify with the new lower payment.

Re: Rapid Re-Score Question (Loan Officers please chime-in)

Anonymous — Tue, 01 Sep 2009 21:27:42 GMT

@ShanetheMortgageMan wrote:
When a rapid rescore is done, the information that you need updated is updated on the credit bureau level. Afterwards, in order for the loan officer to get the results, a new credit check is done. Whatever the balances are when the new credit check is performed is what will be listed on the new credit report, as well as the scores that result from the balances being where they are at. If the account balances are too high now, meaning that the payments on the credit card balances have increased, therefore pushing your debt to income ratio too high in order to qualify, then you have the opportunity of paying them down before closing, providing a new statement showing the new payment, and re-qualify with the new lower payment.

Great explanation and thanks for the quick reply Shane!

So, if my LO says that he may need to pull credit one more time before closing, would it more likely be a rapid re-score or just a pull from the CRA's? This is my first home and there are just some things that I need to buy now and it's causing my cc balances to get a little higher than when I was originally approved.

Thanks in advance.

Re: Rapid Re-Score Question (Loan Officers please chime-in)

Anonymous — Tue, 01 Sep 2009 21:33:40 GMT

It will most likely be just a regular pull. Rapid rescore is done when there is one or more particular items that you need fixed and the LO can get a new score based on that. I had it done recently to remove a dispute stmt from an item. I just closed on my first home so I totally understand how you're feeling. I didn't buy anything for the house until after the day I funded. That's a good rule of thumb. You don't want to do anything to jeopardize your credit!

Re: Rapid Re-Score Question (Loan Officers please chime-in)

ShanetheMortgageMan — Tue, 01 Sep 2009 21:45:59 GMT

Welcome, and I agree it'd just be a regular re-pull. Normally credit isn't repulled until it expires though, and that is currently 120 days on existing homes, and 180 days on new construction homes.

Re: Rapid Re-Score Question (Loan Officers please chime-in)

Anonymous — Tue, 01 Sep 2009 21:50:52 GMT

@Anonymous wrote:
It will most likely be just a regular pull. Rapid rescore is done when there is one or more particular items that you need fixed and the LO can get a new score based on that. I had it done recently to remove a dispute stmt from an item. I just closed on my first home so I totally understand how you're feeling. I didn't buy anything for the house until after the day I funded. That's a good rule of thumb. You don't want to do anything to jeopardize your credit!

Thanks kball64,

I'm hoping that when a LO tells me not to buy anything major, it's because they don't want your FICO scores to go down. However, my FICO scores have actually gone up. Even with my larger account balances, my scores are 50-75 points higher than when I was originally approved.

I'm trying not to overspend but there are just some things that you have to get ordered in advance when you're moving from a 1 bedroom apartment to a 4 bedroom house like I am. Hopefully, these larger balances won't cause any issues with me closing.

Thanks for the input.

Re: Rapid Re-Score Question (Loan Officers please chime-in)

Anonymous — Thu, 03 Sep 2009 04:24:22 GMT

hi, i also need to remove the dispute statment on my report, how did you do it? can you please tell me? i had some good advice but still need all infomation that i can get. i think my LO said we need to remove the dispute statement and re-score.

Re: Rapid Re-Score Question (Loan Officers please chime-in)

Anonymous — Thu, 03 Sep 2009 06:22:41 GMT

Be very careflu runing up your credit reports. I know of 2 people ho have lost homes this way. It is good that your score has gone up, but the singel quickest way to lower it is to run high utilization. On top of that, if your DTI is close to levels, a few thousand in cc debt could bump your payments up quite a bit, especially now that banks are requiring higher principle payments on CC these days.

No offense meant by the way, but there is nothing that you need bad enough prior to closing that is worth loosing the loan. There is a reason that they tell you not to make any large purchases and the UW knows you have been told that by probably both your realtor and LO. Even just the increase in a credit balance can be enough to make a UW that is on the fence with a loan say no if they have to re-pull credit.

Re: Rapid Re-Score Question (Loan Officers please chime-in)

Anonymous — Thu, 03 Sep 2009 12:18:49 GMT

@Anonymous wrote:
Be very careflu runing up your credit reports. I know of 2 people ho have lost homes this way. It is good that your score has gone up, but the singel quickest way to lower it is to run high utilization. On top of that, if your DTI is close to levels, a few thousand in cc debt could bump your payments up quite a bit, especially now that banks are requiring higher principle payments on CC these days.

No offense meant by the way, but there is nothing that you need bad enough prior to closing that is worth loosing the loan. There is a reason that they tell you not to make any large purchases and the UW knows you have been told that by probably both your realtor and LO. Even just the increase in a credit balance can be enough to make a UW that is on the fence with a loan say no if they have to re-pull credit.

Thanks mickie08, all valid points.

I only have 1 cc and my utlization is currently sitting at 3%. Based on the things I ordered, it will go up to 11%. The good news is that this cc account has just been updated to all 3 CRA's within the last week, so none of them should re-post showing the higher balance before I close. Also, I'm doing a FHA loan and my scores are 180 points higher than the 620 needed to qualify so my rates shouldn't be affected.

I'm definitley holding off as many non-essential purchases as I can....the surround-sound system and other things will just have to come later.

However, window treatments and some furniture items had to be ordered in advance. Granted, these aren't must-have items but I don't want to sit on cardboard boxes and I need some privacy from my neighbors. If these purchases cause me to lose my house, then so be it. Hopefully, it won't be an issue as my LO told me that they shouldn't have to re-pull anything prior to closing.

Thanks to everyone for all of the advice.

Message Edited by schlebrock on 09-03-2009 05:18 AM

Re: Rapid Re-Score Question (Loan Officers please chime-in)

Anonymous — Thu, 03 Sep 2009 16:40:51 GMT

Yeah, you should have no problem in that case. Not noing the whole story it was a little concerning. I have seen people max out CC and loose 50 points causing them to loose the loan and/or have the UW question their debt load at the last moment.

Re: Rapid Re-Score Question (Loan Officers please chime-in)

Anonymous — Sat, 05 Sep 2009 22:34:14 GMT

may i ask what is regular re-pull? i have many accounts that need to remove dispute statemetns and afraid my score will drop when my reports re-pull.

thank you

Re: Rapid Re-Score Question (Loan Officers please chime-in)

Jazzzy — Sun, 06 Sep 2009 01:05:42 GMT

@Anonymous wrote:
@Anonymous wrote:
Be very careflu runing up your credit reports. I know of 2 people ho have lost homes this way. It is good that your score has gone up, but the singel quickest way to lower it is to run high utilization. On top of that, if your DTI is close to levels, a few thousand in cc debt could bump your payments up quite a bit, especially now that banks are requiring higher principle payments on CC these days.

No offense meant by the way, but there is nothing that you need bad enough prior to closing that is worth loosing the loan. There is a reason that they tell you not to make any large purchases and the UW knows you have been told that by probably both your realtor and LO. Even just the increase in a credit balance can be enough to make a UW that is on the fence with a loan say no if they have to re-pull credit.
Thanks mickie08, all valid points.

I only have 1 cc and my utlization is currently sitting at 3%. Based on the things I ordered, it will go up to 11%. The good news is that this cc account has just been updated to all 3 CRA's within the last week, so none of them should re-post showing the higher balance before I close. Also, I'm doing a FHA loan and my scores are 180 points higher than the 620 needed to qualify so my rates shouldn't be affected.

I'm definitley holding off as many non-essential purchases as I can....the surround-sound system and other things will just have to come later.

However, window treatments and some furniture items had to be ordered in advance. Granted, these aren't must-have items but I don't want to sit on cardboard boxes and I need some privacy from my neighbors. If these purchases cause me to lose my house, then so be it. Hopefully, it won't be an issue as my LO told me that they shouldn't have to re-pull anything prior to closing.

Thanks to everyone for all of the advice.

Hi...the reason they tell you not to run up any more debts has to do with your debt-to-income ratios. They are more worried about how much you owe vs. how much you make than what it may do to your FICO scores or your interest rate.

In your response, those are the two things you addressed...FICO scores and interest rates. Off point.

That said, you likely won't have any problems...if you close on time...if no card reports mid-cycle...if there is no need for them to pull a new report. And maybe you weren't even close on your debt-to-income ratio.

I, too, have seen deals fall apart. I'm a former real estate broker, and I've given the..."now don't go out and buy new furniture" lecture many times myself based on watching dreams crushed accidentally.

Re: Rapid Re-Score Question (Loan Officers please chime-in)

Anonymous — Sun, 06 Sep 2009 13:09:40 GMT

@LynetteM wrote:

Hi...the reason they tell you not to run up any more debts has to do with your debt-to-income ratios. They are more worried about how much you owe vs. how much you make than what it may do to your FICO scores or your interest rate.

In your response, those are the two things you addressed...FICO scores and interest rates. Off point.

That said, you likely won't have any problems...if you close on time...if no card reports mid-cycle...if there is no need for them to pull a new report. And maybe you weren't even close on your debt-to-income ratio.

I, too, have seen deals fall apart. I'm a former real estate broker, and I've given the..."now don't go out and buy new furniture" lecture many times myself based on watching dreams crushed accidentally.

Thanks for your reply Lynette but my post mentioned FICO scores and utilization rates, not interest rates.

That said, I shouldn't have any issues with my DTI ratio either as I have only 1 credit card and a student loan. When you factor in my PITI and my monthly payments on those accounts (even though I usually carry a zero balance on my cc) my back-end DTI is only 29%.

So, I'm thinking I'll be OK.

Re: Rapid Re-Score Question (Loan Officers please chime-in)

Jazzzy — Sun, 06 Sep 2009 14:32:04 GMT

@Anonymous wrote:
@Anonymous wrote:
Be very careflu runing up your credit reports. I know of 2 people ho have lost homes this way. It is good that your score has gone up, but the singel quickest way to lower it is to run high utilization. On top of that, if your DTI is close to levels, a few thousand in cc debt could bump your payments up quite a bit, especially now that banks are requiring higher principle payments on CC these days.

No offense meant by the way, but there is nothing that you need bad enough prior to closing that is worth loosing the loan. There is a reason that they tell you not to make any large purchases and the UW knows you have been told that by probably both your realtor and LO. Even just the increase in a credit balance can be enough to make a UW that is on the fence with a loan say no if they have to re-pull credit.
Thanks mickie08, all valid points.

I only have 1 cc and my utlization is currently sitting at 3%. Based on the things I ordered, it will go up to 11%. The good news is that this cc account has just been updated to all 3 CRA's within the last week, so none of them should re-post showing the higher balance before I close. Also, I'm doing a FHA loan and my scores are 180 points higher than the 620 needed to qualify so my rates shouldn't be affected.

I'm definitley holding off as many non-essential purchases as I can....the surround-sound system and other things will just have to come later.

However, window treatments and some furniture items had to be ordered in advance. Granted, these aren't must-have items but I don't want to sit on cardboard boxes and I need some privacy from my neighbors. If these purchases cause me to lose my house, then so be it. Hopefully, it won't be an issue as my LO told me that they shouldn't have to re-pull anything prior to closing.

Thanks to everyone for all of the advice.
Message Edited by schlebrock on 09-03-2009 05:18 AM

Hi...I was referring to this comment concerning interest rates.

It does look as if you're OK. Please don't take offense. Those of us who have seen deals fall apart at the last minute because of credit card spending are just trying to relay a word of caution to others who may be close to the DTI limits, FICO limits, etc. Some people barely qualify, and it doesn't take much to tip the scales to "Sorry." A delayed closing for any reason (seller can't move out, interest rate issues, appraisal issues, repairs, etc.) can uncover those new debts. Lenders then get very testy.

Also, in many mortgage-lending scenarios, early on people are asked to sign documents. Among those documents is often a statement where they agree that they won't take on any more debt before closing. In these cases, adding credit card debt violates their agreement with their potential lender.

Re: Rapid Re-Score Question (Loan Officers please chime-in)

Anonymous — Sun, 06 Sep 2009 22:18:38 GMT

Lynette, you're right....looks like I need to read my own posts more carefully.