Help.
My closing is due to happen in 3 weeks. My credit score is roughly 520 and so far two people that I have talked to about my approval says there is no way I can be approved with that score. My lender has sent me a letter stating my approval with him is good until 7/14. According to him I am approved at 8.9% for a fixed 30 year conventional. Will they pull my credit report again before closing? Does this seem possible? When I was shopping around for a mortgage the other people said no way, but this gentleman says I am good with him for the amount. I have faxed him in all of my paystubs and w2's and bank statements.
I am concerned since I was still shopping around and had my credit pulled a few times in the past month that it will lower my score again.
So that is why I am concerned with them pulling my report again within the next 3 weeks...

Any ideas?
Thanks kindly!

Yes, they will pull it again prior to closing. That's to make sure that you didn't incur additional debt or have something negative posted since the last time that they checked.

You'd be surprised at the number of people who will go out and buy a new car, open accounts at Best Buy, furniture stores, etc. right before closing. I had a case where a single mom bought (financed) her son a brand new truck the week prior to closing. You can imagine her disappointment in learning that she could no longer qualify and subsequently could not purchase. I had warned her & her response/logic was.. "they already pulled my credit report, so I thought that it meant that they had already decided to give me the mortgage!"

As a Realtor almost every lender I work with has a disclosure on the Pre-Approval Letter stating the following:

"additional credit inquires and /or the aquisition of new debt could result in the withdrawal of said approval"

I took that right off one of the pre-approval letters I received on a client yesterday morning. My understanding almost all lenders have gone to updating credit reports right before closing, for the exact reasons posted above.

Are you putting any money into the deal or are you looking for 100%?

As several members have said, "Yes" the lender will repull your credit. The bureaus allows you to shop around for a mortgage or vehicle in a 30-Day period and all inquiries within that window, should be collectively counted as 1-Hard pull. Unlike credit cards and applying for other financing, they all will individually count as 1-Hard pull. I hope that your loan is still good for the time being.

Maybe you can "try" to expedite paying down some of your credit balances [online] in the meantime and hopefully that can offset any drop in your score in the next coming weeks. Please remember that the magic number for balances should be kept at around 30% -- 40% should do. Work with the smaller balances first. Since you are about 3-weeks near to your loan closing, maybe you can ask your Loan Officer to provide you with a "Conditional Loan Approval" from the lender, to give you a better peace of mind.

they have approved me at 95% with 5% down. Does that make a good difference. I just spoke to my lender yesterday and he said I am still good until the end of July.

I have a letter of approval stating I am approved until the end of July. Is that the conditional loan approval you are talking about?

They will pull your credit again before closing. Count on it. if your score has dropped you may be in trouble. Don't do anything that will cause your credit score to go down at all. In fact do what you can to get it up.

I am also curious about this situation, my niece is going through something similar now. Let me know how everything turns out. Thanks.

In the worst case scenario, if your credit drops at the last minute, your Loan Officer hopefully can do a Rapid Rescore. For those that don't know, Rapid Rescoring can take effect ASAP, take it that you pay the designated accounts to bring them down and get their official letterhead stating that you've paid down the account to X-amount, then have your Loan Officer submit it to his Credit Agency. This is a quick and permanent change to your score but requires having some money to pay down the balances.

Once the lender pulls the credit for the approval, it is usually good for 30-45 days depending on the lender and terms of the approval. If the deal funds prior to that then they won't pull it. In ten years of writing mortgages, I've never heard of a lender pulling a report twice unless the deal funds after the expiration of the approval. In other words you should be good if you close 3 weeks after you receive your approval.

Welcome mortgagemessiah! Great to see you over here!!!

95% with a 520 credit score????? I say no way. If you get this loan closed please let us know the lenders name. I have 30 files to send them.

I don't know why he would waste my time and his time if he couldn't fund me. Is this common for lenders to be so deceptive?Do you think he is scamming me? Why wouldn't he tell me from the start that he could not lend to me with that score? The Loan paper I signed and faxed back states it is at a 8.9 interest rate (which is high). Hmmmm now I am concerned. I certainly do not want any surprises a day before closing. Should I ask for more documentation from him?

This is the letter I have recieved just a couple of weeks ago:
(names withheld)
Thursday, June 21, 2007

PRE APPROVED MORTGAGE NOTIFICATION
Borrower:
We are pleased to advise you that we have evaluated sufficient income, assets and satisfactory credit history for your new home
purchase under the following conditions:
1. Maximum total monthly mortgage payment $453.70
(Principal, Interest, Taxes, HOA Dues and Insurances)
The following factors were used for qualification:
A. $33,725 Mortgage amount.
B. $5,004.79 Cash needed to close.
C. $1,775 Downpayment.
D. $1,065.00 Seller Assistance (if any).
E. $67.66 Monthly real estate taxes.
F. 8.625% Rate used for qualification.
G. $35,500 Contract Price
2. This approval is valid for up to 30 days. Updated information may be required thereafter.
3. Certain loan programs require specific approval if the property you contract to purchase features:
A. Townhouse style (attached housing).
B. Homes on private roads may require recorded maintainence agreement.
C. Homes without public water and sewage may require well and septic tests.
D. Excess acreage and out-buildings.
E. Builder contracts will require the builder to provide financials, references, and
sign a lender / borrower agreement.
4. This pre approval is based on the assets and employment information provided on the original application, which must be verified by **** . We are issuing this pre approval based on information provided by you the borrower on the application. If there are any adverse changes related to employment or sufficient assets to close, this pre approval would become null and void.
5. Satisfactory credit has been verified.
6. Mortgage commitment for the specific property which you contract to purchase is conditioned upon the following:
A. Receipt of a fully executed sales agreement.
B. A satisfactory appraisal supporting the contract sales price.
C. Provide paystubs and/or income verification for the most recent 30 day pay period supporting $******.
monthly income. (3 paystubs if paid bi weekly).
D. Most recent asset statements (Savings Accounts, 401K, Mutual Funds, Stock Portfolio, etc., include all pages
of each statement).
E. Review and acceptance of a completed file by Underwriting.
7. We anticipate satisfaction of conditions within 10 business days after an appraisal is received.
Sincerely yours, *******

So does this mean I am good until July 21st?