Oh No.....YOU JUST BOUGHT WHAT?

Posted by Mary Ray on Tuesday, November 6th, 2012 at 5:02pm.

bluehm_480As a experienced buyer's agent for many years I've seen just about every mishap that can be made when buyers are in the process of buying a home. Many mistakes can be fixed but there are some buyer's mistakes that can't be and can cause a buyer to lose their dream home and even worse lose their escrow/down payment money. So without further ado, I give you one of the biggest buyers mistakes:

Changing your Credit history before you close on a home! Picture this if you will,a very happy home buyer one who has been pre-qualified for home loan. Their credit is good without any large out standing debt and the have a excellent debt to income ratio. The Buyer and their agent find the perfect home and have their offer accepted on the home. The contract is turned into the bank to go thru the loan process, bank gives them the green light and Home inspections are done and buyer is now on countdown to closing on their dream home. This buyer has done everything right so far. A week before closing,the home buyer is at a car dealership that is offfering amazing credit deals with no down payments on new cars. The buyer thinks since he has such great credit and has already been approved for a home loan which he will be closing on in just a few days, why not buy the car too and he finances it. The buyer has now changed his debt to income ratio by buying the car and no longer qualified for the loan. The bank's underwriter denied his loan and he could not close on his home.

A good rule of thumb for home buyers is Do NOT buy ANYTHING on Credit or with a credit card once you have filled out a loan application. I cannot stress this enough! Do not buy cars, appliances, furniture,TVs,Lawnmowers basically anything that you would use credit/and or a credit card to buy. Also do not apply for any loans, no matter how small they may seem until you have closed on your home. It may seem like a great idea and good planning to buy items ahead of time in anticpation of moving into your new home but even the smallest change in your credit ratios can cause a loan underwriter to throw out your loan and deny it even just days ahead of your closing. Not only can you lose your financing and your dream home you can also lose your escrow/down payment, If your loan contingency time period in your purchase contract has expired or if you did not have a loan contingency clause in your purchase contract.  Dont hesitate to ask your Loan Officer or your Real Estate agent any questions you may have about the the home buying process it could keep you from making a costly mistake!

By David Sporleder | Sporleder-Ray Realty Group | david@davidsporleder.com| Google+

 

2 Responses to "Oh No.....YOU JUST BOUGHT WHAT?"

Ashlee Anderson wrote: I agree borrowers need to consult with their loan officer before buying anything that requires a credit authorization before closing. For one they'll have to explain it before being cleared to close (if it does't mess up the deal entirely) as most lenders will run a supplement to check this. Also borrowers need to be cautious of paying off debt, namely collections, as well. Contrary to what many would think if a collection is old it might not be reporting anymore and have little effect on credit, but if it is brought current the bad credit from this account may negatively impact their credit score.

Posted on Friday, December 14th, 2012 at 11:03am.

Jennifer Ferri wrote: This is really good advice. No one wants a real estate sale to fall through at the last minute, especially when it could have been prevented so easily! It is very important to wrap up any large purchases via credit card or loan before you start the process of buying a home. Once the home deal is all wrapped up, you can go out and get that car or washing machine you had your eye on. Great tip Mary!

Posted on Tuesday, January 15th, 2013 at 11:57am.

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