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New Lending Laws – You need to know this!


New Lending Laws and Gnashing of Teeth

Starting June 1st, yes – just a few days ago all lenders will run another credit report after you close on your home.  Did you hear that right? Yes, if you buy a new fridge it could kill a deal.  Seriously, if you’re a buyer and have been through the lending process last year or so you’ve probably been through the ringer, meaning once you fill out the loan application the hard part starts.  Underwriting the loan has become a lengthy process and whether it be the government (Fannie & Freddie included) or attorney’s every detail is being scrutinized.  A wild ride indeed for some!  And yes, even with great credit 750 and up.

So, As a buyer how do you prepare for this process?

Here’s a few suggestions that will make life easier and less stressful.  And these are in no particular order.

  • The banks still really don’t want to lend money so they are making it harder to qualify.  If you are seriously going to buy a property go ahead and get yourself pre approved.  Submit all docs and get through the lending process first.  You will know your loan package and any surprises up front.  Rates are so dang low now, a fifty year low and you’ll find out exactly what you can get.
  • In making an offer on a property a pre approval letter will get you to the head of the pack if there are multiple offers.  It will also make a very favorable point of negotiation to the seller knowing this is SOLID contract.  Too many properties still fall out because of financing.
  • Go with a smaller bank, credit union or in town lender.  The big banks that are “too big to fail” are the ones making it harder.  You want someone who will pick up the phone, email or you can personally go see.
  • Don’t go out and buy a new fridge or car or anything that can derail your home purchase.  Do it after the property closes and funds, then you’re in the clear.  So now two things happen after you close.
    1. Your employment will be verified.
    2. Your credit score will be run again and compared to the one before.

Each lender will have their own variance and you just won’t ever know what it is.  And don’t test them either.  Once these two items have been cleared the title company will receive the funds from the lender and funding number from the Federal Reserve.  Then you’ve got the house!  Pick up the keys and by all means go out and get a new fridge! And whatever else your heart desires, you deserve it!  More importantly, you just got the most awesome interest rate ever and that’s the big picture.

About Terry Smith

Passionate about real estate, positive problem solver, specialty boutique real estate brokerage that does things your way! A full-time Broker & REALTOR®, helping people buy and sell homes in the Dallas - Plano area. Whether you're a buyer just starting out or someone with luxury properties to sell. I have extensive knowledge and experience to help you with your real estate transaction. I am a native Dallasite. Have questions? Ask me. You can find me on Google+ and Pinterest.

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