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Old 02-01-2008, 09:14 AM
 
32 posts, read 53,493 times
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My credit report was pulled, by my lender, in mid December. I close at the end of this month . My credit score from December was right AT the minimum qualified score for this loan package.

I pay for a service that sends me quarterly updates of my credit scores. Last night, I received the update and my scores dropped . I don't understand why! There's NO new collections or past due records and in fact, I paid off a bunch of collection accounts which were removed from my report. If anything, I expected my scores to be higher, not lower. So I'm very afraid that this will put me under the minimum qualification for this loan package now.

My question is: Is it likely that the lender will pull my updated credit report with the lower scores before I close, or will they just use the report/scores from December?

Would my lower scores make a difference even though there are NO new debts or collection items on my updated report??? I don't want to send red flags to the mortgage company by calling about this if I don't have to...but I also don't want to get any last minute surprises before or at closing.

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Old 02-01-2008, 09:22 AM
 
Location: NC
1,264 posts, read 2,238,066 times
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You say you've paid off collections and old debts recently. Sometimes, by the bizarre, alternate-reality logic of credit report scoring, that can hurt, which is probably what happened to you.

If your loan has already been through underwriting, they shouldn't re-pull credit. Put your mind to rest and just ask them point blank, if they're gonna re-pull credit...just tell them you're curious.
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Old 02-01-2008, 09:24 AM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,907,186 times
Reputation: 1008
First and foremost....those scores online might be different than the ones any lender may use.
FICO has many models out..so they may have the latest or something older.

FICO comes out with a new model every 3-5months. Last one was in September...and I think a new one comes out today (Feb).
Different models have different criterias, and this can affect anyone's score by at least 5-10 points.
You should also be concerned because FNMA passed out new rules for those who have less than a 680 credit score.
They probably wont pull a new one....unless your loan was on the borderline of a decline.


Quote:
Originally Posted by SJPrincess View Post
My credit report was pulled, by my lender, in mid December. I close at the end of this month . My credit score from December was right AT the minimum qualified score for this loan package.

I pay for a service that sends me quarterly updates of my credit scores. Last night, I received the update and my scores dropped . I don't understand why! There's NO new collections or past due records and in fact, I paid off a bunch of collection accounts which were removed from my report. If anything, I expected my scores to be higher, not lower. So I'm very afraid that this will put me under the minimum qualification for this loan package now.

My question is: Is it likely that the lender will pull my updated credit report with the lower scores before I close, or will they just use the report/scores from December?

Would my lower scores make a difference even though there are NO new debts or collection items on my updated report??? I don't want to send red flags to the mortgage company by calling about this if I don't have to...but I also don't want to get any last minute surprises before or at closing.
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Old 02-01-2008, 09:26 AM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,907,186 times
Reputation: 1008
also make sure your collections were removed...if it was updated then your score will drop significantly.
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Old 02-01-2008, 10:32 AM
 
32 posts, read 53,493 times
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Exclamation OMG, It's Never Ending!

My realtor just called and told me that the condo appraisal came in WAY low ($20K less than selling price). There are no recent comps in the area for the past 6 months. She claims that the appraiser is an a** because he didn't want to use comps from the next town over. He used comps that were not really comps (1 bedroom instead of 2) from 1.5 and 2 years ago.

Basically, the mortgage company will not fund the loan at the current price, and the seller claims that she cannot afford to drop the price to the appraisal amount. My realtor is referring me to another mortgage company...I'll have to go through this whole process again (not to mention my above explained credit issue), and HOPE that I can get a similar mortgage package. AND I'll probably have to pay for another appraisal!!

Is it worth is??? Is it worth me trying to get another lender and possibly getting an appraisal for the sell amount?? I'm thinking that the original appraiser didn't use the next town over for a reason???
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Old 02-01-2008, 10:35 AM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,907,186 times
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the next town or the next subdivision?
if it's the next town then I wouldn't buy that house.
Appraisers can use comps about 1.5miles away, and the last 6months of sales. IF there hasn't been any recent home sales in the last 1.5/2yrs....I wouldn't consider that good at all.

If you still want to buy the home....find an appraiser will be able to appraise the home correctly (if it was done incorrectly)....and find a broker who works with more than 1lender.

What is your score? Purchase price? down payment? county/state?
You may qualify for FHA which doesnt have a score requirement

Quote:
Originally Posted by SJPrincess View Post
My realtor just called and told me that the condo appraisal came in WAY low ($20K less than selling price). There are no recent comps in the area for the past 6 months. She claims that the appraiser is an a** because he didn't want to use comps from the next town over. He used comps that were not really comps (1 bedroom instead of 2) from 1.5 and 2 years ago.

Basically, the mortgage company will not fund the loan at the current price, and the seller claims that she cannot afford to drop the price to the appraisal amount. My realtor is referring me to another mortgage company...I'll have to go through this whole process again (not to mention my above explained credit issue), and HOPE that I can get a similar mortgage package. AND I'll probably have to pay for another appraisal!!

Is it worth is??? Is it worth me trying to get another lender and possibly getting an appraisal for the sell amount?? I'm thinking that the original appraiser didn't use the next town over for a reason???
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Old 02-01-2008, 10:52 AM
 
32 posts, read 53,493 times
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Quote:
Originally Posted by renriq02 View Post
the next town or the next subdivision?
if it's the next town then I wouldn't buy that house.
Appraisers can use comps about 1.5miles away, and the last 6months of sales. IF there hasn't been any recent home sales in the last 1.5/2yrs....I wouldn't consider that good at all.

If you still want to buy the home....find an appraiser will be able to appraise the home correctly (if it was done incorrectly)....and find a broker who works with more than 1lender.

What is your score? Purchase price? down payment? county/state?
You may qualify for FHA which doesnt have a score requirement
What's the difference between the next "town" and "subdivision"? The towns in this area are pretty close together, so the next town could be 1.5 to 2 miles away...I'd say more like 2 miles.

My middle score is 620 my mortgage is/was 0 down @ 7.25 and PMI between $66 and $150. Purchase price is $132K but it appraised @ $112K in South Jersey. I can't afford to pay any more in PMI or interest and I only have $2k in Escrow; so 3-5% down payment is out of the question. The complex doesn't qualify for FHA because the owner to renter ratio is higher than 20/80 or whatever it is. So I have to go Conventional.

I do want the place, it's really pretty, and fits me perfectly. But I don't want to pay more than it's really worth. I can't afford to get screwed in this process. I'm practically in tears at work right, I'm not sure what to do!

Last edited by SJPrincess; 02-01-2008 at 10:56 AM.. Reason: Added info.
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Old 02-01-2008, 10:58 AM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,907,186 times
Reputation: 1008
FHA rates are like 5.5% and PMI/MIP payments are like 40-50 bucks.
Find yourself ANOTHER condo/home. You're going to drag yourself into something that isn't going to hurt you in the long run.

There is a reason that FHA wont lend on it.....that should tell you enough that 'investors' are in the area. Renters can trash these homes...and the investors can foreclose on the property. Then the value of your home will go down.

Next town over would be if you're trying to get comps from another city.
Some lenders are strict that they will require the appraiser to only use comps within the subdivision ...which is normally how it's done.
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Old 02-01-2008, 10:58 AM
 
372 posts, read 810,542 times
Reputation: 126
Sorry I didn't read your entire post at first... so I'll edit my post.

With a declining market and an appraisal that far under the asking price, I'd consider letting this one go. You're stretching as it is, looking for near 100% financing. Can you really risk paying 20k too much for a property that may be declining too.
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Old 02-01-2008, 11:21 AM
 
32 posts, read 53,493 times
Reputation: 21
Quote:
Originally Posted by DasNootz View Post
Can you really risk paying 20k too much for a property that may be declining too.
No, I really can't and that's my concern. I just decided that I'm NOT going to run around, like a chicken with my head cut off, trying find another lender/appraiser. I believe that while it is a nice place, it could indeed be worth $112K, especially in this market.

I trust the current appraisal amount. The seller is going to have to lower the price to $112K, or it's a done deal. I'm very upset, but everything happens for a reason; so maybe I'll just enjoy the extra money from my raise while looking for another place.

Thanks you all for the feedback!

Last edited by SJPrincess; 02-01-2008 at 11:23 AM.. Reason: forgot to say "Thanks"!
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