Can you get a Mortgage with Frozen Credit?

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In light of Equifax’s recent massive credit breach, many people are going through the process of “freezing” their credit with each of the credit bureaus. This prevents someone from obtaining a new credit account in your name (it does not prevent them from using existing credit). I actually decided to freeze my credit a while back when it appeared that someone was trying to commit fraud with our address. It’s not that difficult to do and it’s pretty easy to forget about…until you decide to apply for new credit, such as getting a mortgage.

If you are considering buying a home, refinancing or getting a home equity line of credit/second mortgage, the lender will need to run your credit. If you have a freeze on your credit, they won’t be successful. You will need to contact each of the bureaus to remove the “freeze”.  You will also need the 10 digit pin the each of the bureaus provide you in order to remove the freeze (so be sure to keep the 10 digit pins in a safe handy place). For example, you can make the removal temporary by setting time limits, such as when you want a preapproval letter through when you estimate your transaction will close.  Or you can lift the freeze during the preapproval and then reinstate the freeze until your credit needs to be ran again.

The lender will be rechecking your credit if your credit report is set to expire prior to closing and just prior to funding your loan a soft pull is done to recheck your credit. They will not be able to successfully recheck your credit when the freeze is in place. In order to avoid possible delays near closing, you may want to have a conversation with your mortgage professional.

If you’re considering buying or refinancing a home located anywhere in Washington state, I’m happy to help you! Click here for a no-hassle mortgage rate quote.

 

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