If your clients are financing a home in 2020, they may not have thought about what happens when it comes to credit after the contract is signed and the financing process has begun.
It may sound like a good idea, as they get closer to their closing date, to want to line up things to put into it, such as furniture, appliances, and so on.
If they are paying cash for these things with money that is outside of what is being used for their down payment, closing costs, etc., then they are fine.
The challenge comes when they are obtaining or using credit or, for that matter, even having their credit pulled after they start the financing process. This is something they very much want to avoid doing.
There are a couple of reasons for this. The first is that pulling their credit too often can lower their credit score. If those credit scores should drop even a couple of points because of this, it may require them to go into a different mortgage program with a higher interest rate or potentially disqualify them altogether.
If your clients do wind up purchasing something on credit and the lender sees this when they pull their credit right before closing, the loan will have to make another pass through underwriting. If the new payment pushes the qualifying ratios out of range, then, again, the process is over.
If you or your clients have more questions about how pulling credit after signing a contract works or about any of these steps along the process, please give me a call. I would be happy to go over them.