This week's installment from Nathan Seyfer is a common mistake that buyers make. We don't think about all the things that we are doing that could be damaging our credit profile. Yes, you may need a refrigerator or a washer and dryer, but it is best to wait until after the closing before you open up any new credit or take on any more debt. Thank you to Nathan and UICCU for providing such invaluable information to Cedar Rapids home buyers.
Keep smiling!
Karen
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But I needed a fridge!
In those five words a client was justifying the big splurge they had made on a refrigerator and the credit card with no payments, no interest for 6 months that they had just opened. While a seemingly harmless purchase in preparation for their new home, it potentially put their mortgage financing in jeopardy. Lenders can now compare the initial credit report they used to do the approval to a new “snapshot” that compares all debts within days of closing to ensure a buyer still qualifies. New credit cards, loans and any other co-signed debts can appear and that transaction that was within days of closings can quickly fall apart.
Now not all buyers are at their maximum when it comes to debt-to-income, but those that are can quickly go over their lenders maximum approvable amount and no longer qualify. This is among one of the “Don’ts” I highlight when I meet with prospective buyers and is a good tip for all homebuyers to keep in mind.
DON’T make any large purchases or co-sign any new loans if you are intending to or are in the process of buying a home!
For those intending to buy a home the consequence of those credit checks being performed could mean a lower credit score which would affect the mortgage rate being offered or financing types you are eligible for. For those in process that new debt could take you from being qualified to being denied. With the ease of credit cards being offered at check-out at stores and the temptation of a discount for opening, I tell all of my clients to hold-off. That “once-a-year sale” will return, the “no payments, no interest” offer will probably be there in three weeks.
Focus on the end-goal of buying your new home and maintaining your finances until then. It will be worth it as you pull in the driveway at your new home!
Kind regards,
Nathan
Nathan Seyfer
Mortgage Loan Officer
UICCU Mortgage
411 1st Ave SE Ste 100
Cedar Rapids, IA 52401
(319) 378-5508 Office
(319) 331-6770 Cell
(319) 362-1106 Direct Fax
NMLS #477977
Apply online @ www.nathanseyfer.com
Loan Assistants:
Beth Hora: 319-730-0684 | bhora@uiccumortgage.com
Lorraine Melsha: 319-730-0683 | lmelsha@uiccumortgage.com
Your Community. Your Credit Union.
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