After working with buyers (I also work with sellers) for a little over ten years now, I have seen some stuff!! Oh, yeah, some stuff that just makes you wonder what a buyer might have been thinking? As an experienced realtor in the South Phoenix and Laveen area, with a lot of sales experience, I find that a lot of things should be common sense. Yet, it appears that some folks do not find some things to just make common sense. So sometimes like today, I decide to step out of my realtor shoes. Those realtor shoes have been helping buyers and sellers in South Phoenix and Laveen since 2004.
So topic of todays buyers mistake number #2, is pre closing purchases!!
Yes, sometimes foks just get so excited they are buying a new home they begin to spend other money. This does happen buyers! You have a home selected, your realtor and you have negotiated the best offer, you have gone through inspections to verify the homes condition, the home has had its appraisal and it came in at offered price, you are almost at the finish line. Congratulations, you really are just about there, only final approval on the loan, loan documents are generated and then in to a title company to sign the loan documents and finalize the transaction.
It is at the stage of pre closing that most buyers fall into this pre closing purchase trap! Yes, they have taken measurements for that new coach, as well as the new large HDTV that will look GREAT on the living room wall. Maybe even went so far as to make some purchases on new bedroom furniture. The best part as a buyer, is you found these all at great bargain prices and you paid through their in house credit, no money same as cash credit!! Those are good deals.
Problem is, now you have added additional credit liens against yourself, and you may have messed up your debt to income ratio. Most lenders can not make loans above a certain debt to income ratio, usually about 41/43 perccent of income, including other obligations. So, if you've made purchase on credit, you may have messed up your opportunity to finish the purchase. You see, lenders will pull your credit one last time prior to funding a loan, and if your credit or debt has changed, you can be declined.
So, key take away. Don't, I mean it, DO NOT make any major purchase before a closing on a new home. Get the home first, then consider other things, not the other way around.
Hope you enjoyed the tip, it really is a good one. Failure to follow this simple suggestion of not making purchases prior to close, can kill your deal. Oh, and buying a car is WORSE.
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