The old rules remain important: if you’re buying a home and have been credit approved, please, please don’t put anything on credit between the loan approval and the closing of the escrow. I remember telling this to home buyers six years ago and it’s still true today, a nice reminder that the old rules still hold true.

Effective June 1st as part of Fannie Mae’s new loan quality initiative to control underwriting and prevent fraud by borrowers, your lender will probably order a second full screening immediately before closing. This means that if you have obtained or even shopped around for a largish purchase on credit like a car or even a new credit card between the original application for a home mortgage and closing, there is a chance the lender could put the closing on hold pending additional research.

With escrow times getting longer, it’s imperative that potential homebuyers understand how to handle credit wisely and not plan on getting additional credit to buy things for the house just because they were approved for a home mortgage. The logic is this: If you’ve taken out new loans that are sizable enough to affect the debt-to-income ratio calculations used in your original mortgage approval, the deal could fall through. The added debt load could render you ineligible for the mortgage because you suddenly appear unable to handle the payments without a strain on your household budget.

So follow the old rule: if you’re buying a home, don’t even think about buying anything else!

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