Monday, December 22, 2008

What Happens if the Underwriting Guidelines Change After a Loan is Started?

Underwriting guidelines change constantly these days and we are often asked what happens if the guidelines change between the time a loan application is taken and the loan closing.

Q: Does the lender have to honor the old guidelines?

A: No, a lender is under no obligation to honor underwriting guidelines just because a loan application has been taken. Some lenders will honor the existing guidelines once the interest rate has been locked and some will honor them once a clear-to-close (the final underwriting approval) has been issued.

Find out up-front from your mortgage broker what the rules are for the lenders they plan to use.

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