Why Credit Checks During Closing Are Important

Dated: August 1 2019

Views: 352

WHY CREDIT CHECKS DURING CLOSING ARE IMPORTANTWHY CREDIT CHECKS DURING CLOSING ARE IMPORTANT

You've found your dream home. After months of searching, you're finally closing on the house that you've wanted for so long. The last thing you want to do is take any action that would interfere with the closing of your home. Since the start of your home search, your agent has probably told you time and time again not to do anything that would impact your credit score, like opening a new line of credit or making a large purchase. While this makes sense during the approval process, you may wonder why it is key to keep your credit in check until after closing. Here is an explanation of the 2 credit checks performed during the home-buying process and why it is important to maintain your credit from start to finish.

Pre-Approval Credit Check

To get a loan to purchase a home, you'll go through a pre-qualification process. You'll let your potential lender know a variety of financial information, from your credit score and employment to your marital status, as well as any number of factors that can impact your qualification. With this self-reported information, you can then be pre-approved. After that, lenders will verify the information you've provided and this is when they will pull your credit history. It is important that what you've reported matches the credit information pulled by the lender - which is why you shouldn't miss any payments or open new cards during this time. Lenders offer approval based on a risk assessment, and you do not want them to think that you are a risk.

Credit Check at Closing

The main concern of the lender is the risk you pose to them. Because it can take time for an offer to be accepted, your lender may pull a second credit check while waiting for your loan to pass underwriting. This is to ensure your credit hasn't changed since the initial credit check. If you took out a loan or created massive credit debt, you could change your debt to income ratio and your lender could decide you are too risky to loan to. This is why it is so very important to keep your credit in check before, during, and after the home-buying process!

Never hesitate to call ME, your favorite Realtor,  with any real estate questions or concerns.  (210)410-9119

Blog author image

Celina Garza

In today’s highly accelerating real estate market, there is no substitute for an exceptional, knowledgeable real estate agent. As a native Texan and Realtor in San Antonio and surrounding areas, yo....

Latest Blog Posts

THE DIFFERENCE BETWEEN HOME WARRANTY HOME INSURANCE

When purchasing a new home, it’s important to do in-depth research on all facets of the homebuying process. One thing you’ll need to understand is how to best protect yourself and your

Read More

Apr 5 2021 61087 1

7 Tips for Saying Goodbye to Sentimental Belongings NAME 7 Tips for Saying Goodbye to Sentimental Belongings COPY When I work with clients who are downsizing to a smaller home, one of the

Read More

The Dos And Donts Of Accent Walls

Accent walls are in style and aren’t going away anytime soon. You have unlimited options for your accent wall color, and can even add texture! Accent walls should be just as special as you, and

Read More

Rookie Agent

What a journey this has been this far!! I’ve got a few more clients under contract . Closed on my 5th property with my 3rd client. This business venture is way different than what I thoughtS I’m

Read More