Homebuyers beware. Please do not throw your debt ratio out of whack before the close of escrow. Many deals fall through simply because of inopportune spending. A mortgage that you were previously approved of by a lender before closing can drastically change due to excessive debt. Lenders are pulling credit history and credit scores within a week of a buyer's schedule closing date just to make sure nothing major has change. What the lender doesn't want to see is a huge run-up of credit-card debt or other loans. Some lenders may require for you to sign a statement affirming that there has been no change in your finances and employment that will affect your ability to repay the loan back. Accumulating debt before closing can cause your credit score to change and the lender may longer be willing to lend money at the rate promised, or maybe not at all. My advice is to wait to do that shopping after closing.
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Westbrook Realty Broker-Owner - Grand Rapids, MI
Westbrook Realty - Grand Rapids Forest Hills MI Re
I have heard all the stories I need a new car, we need new furniture for the new house, and the list goes on. Good counsel for the buyers thanks.
Dec 03, 2007 06:39 AM
Best Buyer's Broker Realty - Valley Stream, NY
EBA
Larry - I agree and let my buyers know about this early on in a transaction.
BTY - there should be a 'no" before longer in next to last line. I assume it should read ...and the lender may NO longer be willing ...
Dec 03, 2007 06:41 AM
Coldwell Banker - Sacramento, CA
916-342-1372 / DRE# 01706589 Sacramento, CA
That is very good advice! The loan officer that I refer my clients to has an over-sized bright blue sheet with all the "Do Not Do's" on them...a lot of people are tempted to spend money on their new house during escrow...
Dec 03, 2007 07:31 AM
Diamond Partners Inc - Overland Park, KS
Overland Park Residential Real Estate
Yes, I have a client who is putting off her Christmas shopping until after closing - I coached her well. I wish the same advise about not doing anything to change your buying power as as effective last year when one week before closing my buyer's wife quit her job. She thought they were out of the wood because the bank had everything they needed. The mortgage company killed the deal.
Dec 03, 2007 09:31 AM
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