Tampa Palms, Westchase, Carrollwood and Tampa Bay Real Estate News From Jeanne Prigitano

Mortgage lenders have definitely tightened up their lending guidelines. Nevertheless, contrary to popular belief, people are able to get mortgages. One thing I have always told buyers is … once the mortgage has been approved, please do not make any other purchases. Of course it is tempting to buy furniture, appliances, window treatments and a variety of other products for the new home. However, you do not want to put anything on your credit card and you want to be careful about the buy now and pay later scenarios. Anything that changes your debt ratio or credit score could jeopardize your loan.

This has always been an issue. I know of a buyer who, after his mortgage was approved, purchased a new car. The lender checked his credit 5 days before closing on the house and would no longer fund the loan.

In the past, mortgage lenders could check credit again just before closing but were not necessarily required to do so. Beginning June 1, 2011, Fannie Mae has implemented a policy whereby lenders are responsible for certifying that the borrower's monthly obligations have not increased from the time of the initial credit report through the closing date. Not all lenders use Fannie Mae guidelines but most do. Although this applies to conventional mortgages only (no VA or FHA), it is only a matter of time before it will apply to all mortgages and does not currently preclude lenders from checking the borrower’s credit just before closing.

Can you get a mortgage? Yes, lenders are approving loans. Are guidelines tighter? Of course because lenders are trying to protect, as best they can, against the high rate of default. So, if you are lucky enough to get your mortgage approved, don’t start going on a spending spree. You might end up with your boxes packed on a moving truck with nowhere to go. To add insult to injury, the financing contingency period is over and you may even lose your deposit.