Credit Refresh - Freaking out!! 7 days to closing.

[Anonymous]

Hi all. I'm new to the forums and a new homebuyer. I've scrolled through these forums pretty frequently throughout my whole homebuying process - it's been so informative and helpful!! Sooo, quick break down of events: Pre-approved for FHA loan end of August. Found a house, got under contract beginning of September. Received conditional approval -  I sent everything UW requested. I just received my closing disclosures and acknowledgement on Wednesday the 9th but I have not received an official Clear to Close yet. I was told by my LO that a soft pull or a "credit refresh" will be done on the day of closing which is October 18th. I've been freaking out because... I applied for a credit card the same month I applied for this mortgage. When my broker was processing my application, they had sent me a worksheet of inquiries asking for me to explain if any of the inquiries resulted in any new debt. I selected "NO NEW DEBT" on this card because at the time, I did not have a balance on that card. I made a $1300 charge to it this month because of car repairs. I talked to my LO about it, and he said that I should be fine and that it shouldn't get flagged... I don't mean to question my LO, but he explained that UW is only looking for any NEW inquiries for credit from the time I was pre-approved right up to closing day. HELP. 

[Anonymous]

Congratuliations on the pre-approval, I just closed on a house and the way it was explained to me was: They will compare data from your credit report that was pulled on the pre approval. If any new inquires show up, processor will request a LOX. On the LOX it will ask if new debt was obtained, if the answer was no and the card was not being used at the time you should be good. The refresh (soft pull) will only look for any new debt (large purchased) auto loan, furniture etc.... In your case you should be good, unless the credit report expires before closing. If so they will re-pull your scores and the new debt will show and will have to be added to the DTI. Hope this helps put your mind at ease, do not stress and simply provide the documunentation as soon as possible to get your file cleared! Good Luck

[Anonymous]

That's very helpful. Thank you!! Did they do the credit refresh the day of your closing or was it done a day or two before?

[Anonymous]

We had a couple of hard pulls, but those were expected because of some disputes we needed removed as well as a rapid rescore. The softpull is usually done prior to closing, or right before funding. Best advise is not to accrue anymore debt until the you get the clear to close and the loan is funded and you have the keys. 

[CreditInspired]

Hi OP and welcome

Can you get that $1,300 paid off before closing? Try your best to do so because that is a new debt with a monthly payment that wasnt included when you applied for the mortgage. If you were teetering close to the edge on DTI, it could be a problem. 

[Anonymous]

It would be pretty tight by Friday. When did you have your credit refresh done? Day of closing or just before?

[JVille]

In my experience though other lenders may do it differently, scores are pulled just before drawing documents. But remember you will be asked to sign & date a new application at closing attesting that the balances and debts listed are correct. Something to think about. Can you have a family member pay this off and you and they can deal with it later as a family?
A $1300 new debt is significant, not like a balance that has changed $35 or $50. You went out and applied for and took on new debt just before COE.

You have reason to be concerned and I would discuss it immediately with your LO.

[Anonymous]

@jenjen7 - Were you able to close?