Do Not Buy New Furniture!

Real Estate Broker/Owner with MBA Broker Consultants CalBRE Broker #00983670

One of the biggest mistakes that new homebuyers sometimes make is purchasing new furniture, electronics, or appliances.  A homebuyer may get so excited about her new home, that he will purchase furniture or appliances for the new home.  Perhaps the homebuyer wants new electronics, such as a television, computer, or stereo system in his new home.  That’s the biggest mistake a homebuyer could make!

It is easy to get excited, but buying items on credit can ruin your mortgage loan approval.

How would you like to have new furniture, brand new appliances, a new flat-screen television, and yet have no house to put them in?  That would be very disappointing, wouldn’t it.  That is what could happen if you jeopardize your loan by making purchases on credit BEFORE you close escrow.

Your lender is going to run your credit check again.

You probably were not aware of this, but a few days before closing, your mortgage lender will pull your credit report again.  He will verify that your credit is still the same as it was when you applied for the loan.  If additional items show up on your credit report, such as a new account you applied for, it could change your loan approval.

If a new credit account shows up on your report, the lender will ask you to write a letter called LOE, which stands for letter of explanation.  If you were approved for the new credit account, the lender will recalculate your debt ratio to include your new debt, which means your debt may now be too high to qualify for your mortgage loan.

Save your cash for closing costs.

You need to keep your priorities in mind.  Your first priority it is to get your home purchase closed and get the keys in your hand.  Your next priority is to make sure that you can afford to pay the mortgage each month. Don’t jeopardize your dream home!

Read more in our book, "Buy Your First Home",

Image courtesy of Ambro at

Posted by

Regina P. Brown
Broker, Realtor®, M.B.A., e-Pro, GREEN
California DRE # 00983670


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Jennifer Mackay
Counts Real Estate Group, Inc. - Panama City, FL
Your Bay County Florida Realtor 850.774.6582

Good  tips for buyers Regina P. Brown - amazing how so many forget they are making perhaps the most expensive purchase of their lives.

Jun 29, 2016 09:07 PM #1
Raymond E. Camp
Howard Hanna Real Estate Services - Ontario, NY
Licensed Real Estate Salesperson Greater Rochester

Goiod morning Regina,

And then blame the agent or broker for the problem!

Make yourself an astonishing day.

Jun 29, 2016 09:20 PM #2
Chrissi Chapman Topoleski
Coldwell Banker Residential Brokerage - Leesburg, VA
HOME~There is no place like it!

All good loan officers need to hammer this one home! It is so exciting to shop for a new home, but you have to own it first!

Jun 29, 2016 09:34 PM #3
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Good morning Regina. Don't buy anything until after the closing! So easy to say, so easy to forget! Enjoy your day!

Jun 29, 2016 10:02 PM #4
Sheila Anderson
Referral Group Incorporated - East Brunswick, NJ
The Real Estate Whisperer Who Listens 732-715-1133

Good morning Regina. This is really important and a lesson for all to remember.

Jun 29, 2016 10:06 PM #5
Regina P. Brown
MBA Broker Consultants - Carlsbad, CA
M.B.A., Broker, Instructor

Good morning my AR friends!  Thank you for visiting and leaving a comment.  Have a great and productive day.

Jun 29, 2016 10:23 PM #6
Melissa Marro
Keller Williams First Coast Realty - The Marro Team - Orange Park, FL
Jacksonville Real Estate and Home Staging

I completely agree. I was representing the seller in a situation where a buyer decided to buy a new car. That deal fell apart nearly immediately (thankfully). The buyer's agent felt terrible and advised that he told the buyer not to do these things, but the buyer seemed to think he knew better. 

Jun 29, 2016 11:48 PM #7
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Regina P. Brown

M.B.A., Broker, Instructor
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