Mortgage - soft pull prior to closing

[Anonymous]

Doing an FHA loan that is closing 8/24. Lender ran credit on 7/7 as my first report was over 120 days old. Credit was fine and conditional approval granted. I am told that lender will do a soft pull 3 days prior to closing. My tri merge mortgage middle score is 695. My DTI is at 37%. Since the credit pull I used $3k of my existing credit line, and an additional $700 on cc. No new credit lines or car loans of any kind. I am still under 40% DTI.   Do you think lender will have a late credit development problem ?

[Anonymous]

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In underwriting here. Lender will pull a gap report or a soft pull within 5 days of closing usually sometimes closer. The gap report wont actually have any scores on it. So the only time the terms of your deal will change score wise is if you report expired and they had to repull. It sounds like that did happen and you were fine. 

Now you using credit in between that time will show up on the gap report. So if your monthly payments went up then those new payments will show up on the report and the underwriter will factor the higher payments into your DTI. If your DTI is fine with new payments you are fine. The only time it becomes an issue is when someone uses up a lot or takes out new debt and then they no longer qualify with the new payments. 

Not sure what you mean by late credit developments? If you could explain that more I can definitely help answer it!

[Anonymous]

Thanks for the detailed reply. I am spooked by all these real estate experts saying don't buy anything. When things like refrigerators take forever.  I want to use $1700 on my Lowes card for a frig, and $2200 for furniture that takes 8 weeks. Even with that factored in, I am under 40% DTI on an FHA loan.

[Anonymous]

As long as the new payments dont make your DTI go over the max then you are totally fine. Make sure that you have new statements from the creditors after the increase has taken effect. So that you know exactly how much your payments increased. I know it can be spooky but everyone on the lending side will always tell a borrower do not even sneeze during the process and dont use up credit or open new debt until 10 days  after you have closed. It sounds extreme but the reason they give that advice is because I cannot tell you how many people I have seen no longer qualify right at the end because they decided to use a large amout of their cards or they opened new debt like a new car loan or personal loan and now they long qualify. 

It sounds like you are sure that with your new payments your DTI will be fine qualifying wise. Just be cautious and mindful of DTI if you decide to use anymore credit.

[MauiMan85297]

You won't have any problem with spending on current lines of credit, what becomes a problem is when you open new lines of credit (An LOE would be required to explain if any new credit resulted in that inquiry and any balance).  The new charges you take on like the previous poster stated- only if your DTI was marginal to begin with that could possibly harm the file.