Don't! Don't!! Don't!!! Torpedo Your Loan

By
Real Estate Agent with Big Block Realty 858.232.8722 CA BRE# 01261476

Your lender checks your credit at pre-approval and again before you close escrow, so please do not torpedo the efforts of your Lender & REALTOR®!!! When you're about to finance buying a house or even refinancing, there's a lot of "Don'ts" to be aware of.

 

I've learned some of these the hard way and between these hard lessons learned and constantly being educated by my buddy and #1 Lender Jason E. Gordon,
of Amerifirst Financial, I've learned to warn my clients about the following rules: 

 

 

  1. Don't buy or lease a new car at all, until after you close escrow.
  2. Don't open new credit cards or new lines of credit at department stores.
  3. Don't start buying furniture or appliances for you new house.
  4. Don't cosign on any debt with anyone (including student loans).
  5. Don't quit your job, but more importantly, if you do change jobs, do not change industries - you need a two year work history in the same industry.
  6. Don't switch from a salaried or w-2 job to a commissioned job.
  7. Don't start a gambling habit and running up existing credit card balances after the Lender has initially pulled credit can also be a bad idea.
  8. Don't forget to keep your bills, child support and tax payments current.
  9. Do not co-mingle personal and corporate income if you own an
    incorporated business. Bonuses must be done through payroll by the way.
  10. Don't transfer large sums of money between bank accounts without
    a paper trail.
  11. Don't make random deposits into your bank account without
    a paper trail - or it could require seasoning before it counts as income e.g. #12.
  12. Don't accept financial gifts without a paper trail to show the source.

I have had the majority of these seemingly innocent transactions at one point or the or other, either sink my deal, delay my deal or at the very least create a major panic for all involved. Keep your eye and credit focused on the prize; closing escrow first!

For a better explanation or for any questions,
please contact myself or my #1 lender:

Jason Gordon
Branch Manager | Sr. Mortgage Loan Officer | NMLS 259027
AmeriFirst Financial, Inc. | NMLS 145368
11440 W. Bernardo Court, Suite 300, San Diego, CA 92127
Mobile: 619.200.8031 | Office: 858.461.7007 | Desk: 858-564-8229
jgordon@amerifirst.us | www.GordonMortgage.com
Electronic Business Card: www.VIPBorrower.com

 

 

all photos from Pexels.com

Posted by


Thomas J. Nelson
REALTOR®, CRS, RCS-D, CDPE, e-Pro, Certified Military Home Specialist, Luxury Home Specialist, Author, Keynote Speaker and  Podcast Host 

Serving Coastal San Diego from Carlsbad to Coronado, Downtown, Balboa Park Area,
La Jolla/UCSD & Mission Bay Park Areas
I Offer Rebates to Veterans
& Active Duty

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RCS-Divorce     Southern California Chapter of Certified Residential Specialists (CRS)

 
 
Disclaimer:  Nothing in this blog article is to be construed as legal advice, tax advice, medical advice or financial advice.  For legal advice see an attorney.   For tax advice, health or financial advice see a tax attorney, certified public accountant, or other qualified professional.

Comments (23)

Jan Green - Scottsdale, AZ
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Very important for buyers to understand and follow your guidelines.  Excellent post!

May 26, 2022 08:02 PM
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

It’s always good to stop and consider your decisions and all of your options when the situation is as equally complex

May 26, 2022 08:38 PM
Jeff Masich-Scottsdale AZ Associate Broker,MBA,GRI
HomeSmart Real Estate - Scottsdale, AZ
Arizona Homes and Land Group/ Buy or Sell

Great points and illustration Thomas. Buying a car during the loan app is certainly a no no. Jeff

May 26, 2022 08:49 PM
Paul S. Henderson, REALTOR®, CRS
Fathom Realty Washington LLC - Tacoma, WA
South Puget Sound Washington Agent/Broker!

Thank you for sharing this information for our buyers, Thomas. This could come in very handy 🙂.

May 26, 2022 09:00 PM
Buzz Mackintosh
Mackintosh REALTORS - Frederick, MD
“Experience, reliable, leadership”

Great list to keep in front of Buyers during the process. The lenders I use also have a similar list. I have heard many stories that have sunk a loan where a borrower absentmindedly buys furniture , jewelry or a car. 

May 27, 2022 03:35 AM
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hello Thomas - lessons are a part of life, especially in real estate where most don't practice it (or participate) consistently.  "Sharing is caring" and that information continues to be worthwhile.  

May 27, 2022 06:02 AM
Brian England
Arizona Focus Realty - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

When people are under contract to purchase a home, they should definitely consult the lender before doing anything financially that is outside of their normal routine.

May 27, 2022 06:12 AM
Dr. Paula McDonald
Beam & Branch Realty - Granbury, TX
Granbury, TX 936-203-0279

Oh yes, we need to paste these reminders to anyone who is borrowing to their bathroom mirror!

May 27, 2022 07:15 AM
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe
  1. Don't switch from a salaried or w-2 job to a commissioned job.
  2. We will all in trouble following that advice.  Do you have a realtor 401k plan? 
May 27, 2022 08:01 AM
Brenda J. Andrew
ULTIMA REAL ESTATE - Corpus Christi, TX
Professional Realtor in Corpus Christi, TX

Well deserved feature Thomas.  I had to learn a few of these the hard way also.  I am going to share this information on my social media.  It is good for my clients to hear from someone other than myself!  I love your pictures and your caption, it is perfect! Have a great day!

May 27, 2022 08:16 AM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Great post, Thomas. Reminds me of the document I hand out with similar advice, which I call "Don't Get Yourself Into A Pickle" and it has a picture of a pickle jar on it.

May 27, 2022 08:52 AM
Ginger Harper
Coldwell Banker Sea Coast Advantage~ Ginger Harper Real Estate Team - Southport, NC
Your Southport~Oak Island Agent~Brunswick County!

Great illustrations.  Yes...many torpedo their own success.

May 27, 2022 09:52 AM
Jason E. Gordon
AmeriFirst Financial Inc, San Diego, CA - San Diego, CA
Sr Loan Officer, CMA, CMPS, CDLP, CDRE, RCSD, CDPE

Excellent information Thomas J. Nelson, REALTOR ® e-Pro CRS RCS-D Vets!!!

I would also add that running up existing credit card balances after the Lender has initially pulled credit can also be a bad idea.  Lenders pull a "credit refresh" at the end of the escrow period (before they fund the loan). If the original balance on the Capital One credit card was $1000 (with a minimum payment of $25.00), we could have problems from a debt-to-income (DTI) ratio if that same credit card now showed a balance of $10,000 (with a minimum payment of $250.00). Just be aware of the credit refresh too...by the way, if we see a brand new credit inquiry from Porsche Financial Services on the credit refresh, we might have even bigger problems!

May 27, 2022 10:26 AM
Diana Dahlberg
1 Month Realty - Pleasant Prairie, WI
Real Estate in Kenosha, WI since 1994 262-308-3563

Excellent Post!  Every Buyer needs to be aware of these pitfalls!  I have had a few of these happen in my 27 years in real estate ... and even when we tell our buyers they sometimes just "forget".  

May 27, 2022 10:51 AM
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

I unintentionally came back to this one but I’m glad that I did because I get to appreciate the metaphor and the great picture! :

May 27, 2022 10:36 PM
Kat Palmiotti
406-270-3667, kat@thehousekat.com, Broker/REALTOR® - Kalispell, MT
Helping your Montana dreams take root

This is an excellent list of don'ts! I have had some of these happen as well, and it's not a pretty picture!

May 28, 2022 04:17 AM
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

Hi Thomas,
It's surprising to me how little common sense people have when utilizing credit and especially when purchasing a home.  Great list of things not to do during the loan process.

May 28, 2022 09:32 AM
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

If only people would listen! We once had buyers who had tried to buy 3 different houses - none of which would appraise. And then, finally, they were set to close. Until the day before closing, when they drove up in a brand new car.

May 28, 2022 01:31 PM
Kevin J. May
Florida Supreme Realty - Hobe Sound, FL
Serving the Treasure & Paradise Coasts of Florida

After warning customers and clients about these perils time after time I can never figure out why they think they are immune to the consequences. Rectifiable, usually yes, however, the quandary continues to exist. Dive, dive, dive!

Jun 05, 2022 05:49 AM
Joe Jackson
Keller Williams Capital Partners Realty - Columbus, OH
Clintonville and Central Ohio Real Estate Expert

This is an excellent post with great information. Thanks for sharing it.

Have a super fantastic week!
Joe Jackson, Realtor-KWCP

Jun 27, 2022 09:03 AM