Things you shouldn't do while buying a home !

By
Services for Real Estate Pros with A Serendipity World

So, your on your way. You have found the house of your dreams. The lender tells you he thinks he can get this done. Your credit is good, your debt to income ratio is good, so are your trade-lines. You have all the winning factors to obtain a loan. I'm sure you feel great. Many customers who first come to us who are not pre-qualified come in having no idea what their credit score is and some believe their credit is so bad they can't get a pack of gum on loan. You then find, the total opposite. That somewhere along the line of restoring your credit worked ! Some will say, well if I can buy a house, I can buy a car, I can get the credit card I have been wanting, maybe I will go buy all new furniture for our new house.....STOP !        TALK TO YOUR LENDER or REAL ESTATE AGENT before you make any new purchases or it can stop the purchase of your new home ! When you apply for a mortgage loan there are several factors in evaluating you, your credit worthiness and home loan application. One of the things the Lenders, underwriting will look at is your credit score, your credit score tells them how well you have managed your credit over the years, they will also look at your debt to income ratio. They will give you credit for all the verifiable income you have and look at what you have going out from that money. If you are over extended this will hurt your chances for obtaining a mortgage loan. That is why it is crucial to NOT run out and buy anything or at least until your lender tells you its okay. Use extreme caution and listen to the wisdom and advice of your lender and/or agent as they want you to be in your new home !  Don't get ahead of yourself through all your excitement. All the other things will come and will come in time. But get into your new home FIRST. Listen to your lender/agent, they will give you the green or red light, but you as a word of caution should always stay in yellow....

A simple over-view and rules to live by when purchasing your new home is :

Don't make any major purchases such as a new car, expensive electronics or appliance, or anything else that you cannot pay cash for. The extra payments may prevent you from getting a loan.

Don't move money from one account or investment to another. One of the things a lender is concerned about is the source of funds for your down payment and closing costs. The lender will ask for statements for the last 3 months for all your bank and investment accounts and even your company 401K and retirement accounts.

Lenders like to see what is referred to as "seasoned money", that is, money that has been accumulating in an account over a period of months or years. If your bank account has a large deposit that was made less than 3 months ago they may think the money was a loan from a relative who is trying to help you qualify for a loan. Then you will have to prove where the funds came from which can be a time consuming process.

Please, leave your money where it is until you talk to a loan officer. And don't move a significant amount around without letting the lender know about it in advance.

The reward for your patience is ohhh sooo bitter sweet !

 

 

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“When one door of happiness closes, another opens; but often we look so long at the closed door that we do not see the one which has been opened for us.” ― Helen Keller

 

                                                                              

                          

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Rainmaker
374,082
Donna Yates
BHGRE - Metro Brokers - Blue Ridge, GA
Blue Ridge Mountains
Melissa:  Congrats on your post becoming a featured article.  I remember when I was a first time buyer, I did not realize that charging on my credit card could have caused my husband and I not to get the house.  But it makes sense.  Your post should help a lot of new buyers out there.
Oct 03, 2007 03:12 PM #14
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566,489
Rosemary Brooks
BMC Real Estate - 209-910-3706 - Stockton, CA
The Mother & Daughter Realty Team
Melissa, this is a great reminder.  I say reminder because buyers seem to always forget at least the one about buying a new car --- they just can't wait, it seems.  Then they want to blame the loan officer for not telling them they could not go out and raise their liabilities before the purchase was closed.
Oct 04, 2007 03:07 PM #15
Rainer
26,520
West Hartford CT Real Estate Agent | West Hartford Realtor | www.CTMike.com
ERA Broder Group - West Hartford, CT
DON'T make large deposits! I've had many folks do this and the red flag pops up HIGH in the air when underwriting sees the record. Now it's time to show the source of the money... and you betetr hope you can!
Nov 07, 2007 04:52 PM #16
Rainer
26,520
West Hartford CT Real Estate Agent | West Hartford Realtor | www.CTMike.com
ERA Broder Group - West Hartford, CT
Ah.. such good advice. Now.. if they would only listen to us and our professional advice!
Nov 19, 2007 04:03 PM #17
Ambassador
1,709,615
Dale Baker
Baker Energy Audits and Commercial Properties Inspections - Claremont, NH
New Hampshire Relocation Real Estate Information

Howdy Melissa

You have written some very fine tips for home buyer's.

Have a good one

Dale

Dec 04, 2007 09:52 AM #18
Ambassador
566,489
Rosemary Brooks
BMC Real Estate - 209-910-3706 - Stockton, CA
The Mother & Daughter Realty Team
I like the way you layed it out and this is good information.  Bookmarked for later use.
Jan 16, 2008 01:13 PM #19
Rainer
8,844
Michael McEleney
Urban Acres Real Estate - Coralville, IA
' Honesty. Integrity. Loyalty.'

Melissa:

Very good/important information for Firsties. So many younger people will be in debt up to their eyeballs by trying to keep up with their buddies-who are also in debt. Nice to hear your helpful thoughts...

Feb 04, 2008 02:10 AM #20
Rainer
58,173
Don Draughn - Mortgage Professional
High Point, NC
This is great advise to any potential home buyer.  I wish all of my clients would listen to this.  It would make my job so much easier.
Feb 18, 2008 12:44 AM #21
Rainmaker
59,389
Sandra Workman
Keller Williams Preferred Realty - Kankakee, IL
BBA, Broker, CRS, GRI, ABR, SFR, CNE, ePRO, CNHS
Great advice, wish they'd all adhere to it!  :)
Feb 20, 2008 11:18 PM #22
Rainer
229,238
Ryan Shaughnessy
PREA Signature Realty - www.preasignaturerealty.com - Saint Louis, MO
Broker/Attorney - Your Lafayette Square Real Estate Partner

Had a buyer purchase a new car the month before closing - and worse, he is a real estate agent.  Luckily, it didn't impact the sale.  Great advice - that is often overlooked.

Oct 11, 2008 10:59 AM #23
Rainer
12,868
Raj Khurana
RE/MAX R.E. (Mountain View) - Calgary, AB
Realtor - Link to Calgary Homes

Excellent information, though overlooked mostly especially by those who should not.

Jan 28, 2009 02:23 AM #24
Rainmaker
19,440
Corey & Erika Kahler
The Cascade Team - Kirkland, WA

Excellent advice!  What a great reminder! 

Feb 12, 2009 09:49 AM #25
Rainmaker
798,159
Troy Erickson AZ Realtor (602) 295-6807
Good Company Real Estate www.ChandlerRealEstate.weebly.com - Chandler, AZ
Your Chandler, Ahwatukee, and East Valley Realtor

Melissa - How about this one - Don't change jobs.  I was in the mortgage industry before I got into real estate and I saw some people do some crazy things.  One borrower purchased a brand new car, which lowered their credit score, which changed their entire loan, including increasing their interest rate.  One borrower changed jobs just before the loan closed.  It's hard for people to understand how their decisions may affect the purchase of their home.  Most of them end up blaming the lender, and that's partially why I am in real estate today.

Mar 18, 2009 09:02 AM #26
Rainer
24,603
Keith Pound
EXIT REALTY CRUTCHER - Louisville, KY
Realtor, Auctioneer - Louisville, KY - 502-645-5950

Great advice, if the buying public will only listen

May 03, 2009 12:32 AM #27
Rainer
50,813
Connie Winstead
Nancy Puder & Associates - Arroyo Grande, CA
San Luis Obispo County CA Real Estate Agent

great info / can i repost on my blog?

thank you so much.

Jun 04, 2009 09:01 AM #28
Rainmaker
72,258
Nancy McNamee
Keller Williams Realty - Roseville, CA

I overheard a loan officer talking to a buyer and his message went something like..."Did you cosign for your boyfriend's motorcycle?"  "Well, you no longer qualify for your home loan."  Ouch!

Nov 16, 2009 02:57 PM #29
Rainmaker
985,918
Will Nesbitt
Nesbitt Realty at Condo Alexandria - Alexandria, VA
Nesbitt Realty is a family-run brokerage.

Great tips. Thanks for sharing.

Dec 28, 2009 11:20 PM #30
Rainmaker
44,542
Natalie De Leo
Mortgage Resource Plus - Southfield, MI
Former Realtor now Mortgage Consultants

Great blog Melissa. We have a letter that goes out of the don't while you are waiting to close.

Some of the don't are:

Don't change jobs and if you have too let your lender know right away.

Don't apply of the defferred interest for furniture or appliances for credit cards.

Don't deposit or transfer funds from one account to another.

Don't attempt to consolidate bills before speaking with your lender!

Don't let anyone pull your credit!

Don't buy or lease an auto!

The above items may prove to be a detriment when you wish to move forward with the loan process and or close on your new home.

Jan 05, 2010 07:33 AM #31
Rainer
37,060
Kay Horacefield
UTR-Texas Realtors - Clear Lake City, TX
Houston-Clear Lake City-League City, TX

Great advice.  Another tip, let them know not to lend money to a friend or family member during this time.  I had that happen and it changed the entire buying picture. 

Nov 12, 2010 02:00 AM #32
Rainer
23,864
Steve Laird
Anderson Real Estate Sales - Chico, CA
Steve Sells Chico Real Estate
I've had instances where my buyers have actually closed accounts by paying them off and closing out accounts thinking that it would raise their credit score and actually it wound up lowering their credit score by a few points - Don't know the logic of this, but check with lender before closing out accounts.
Dec 01, 2012 04:54 AM #33
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Melissa Grant

The Law of Attraction In Life & Business
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