This is a great list that all buyers should use....and one in the excitement of the moment that it's easy to forget....all things in good time...Have a good time buying that new house ! - Hansons Both
These 10 Commandments home buyers must follow may seem like common sense to many. Buyers, however, can sometimes forget with all the excitement surrounding the buying of their new home. In the past couple of weeks, I have heard of two separate buyers who saw their home loan turned down, and their dream shattered, a few days before closing because they had bought furniture for their new home before it actually became their home. Both of them now have beautiful furniture with no home to put them in.
These two buyers were not my clients but it always hurts when I hear of transactions falling apart for reasons that could have been avoided. These 10 commandments are part of the buyer packet I give all my clients when we first meet and I always stress that once they get pre-approved and the process is started, they can't do anything that might affect their credit.
1. Thou shalt not change jobs, become self-employed or quit your job.
2. Thou shalt not buy a car, truck or van (or you may be living in it)!
3. Thou shalt not use credit cards excessively or let your accounts fall behind.
4. Thou shalt not spend money you have set aside for closing.
5. Thou shalt not omit debts or liabilities from your loan application.
6. Thou shalt not buy furniture.
7. Thou shalt not originate any inquiries into your credit.
8. Thou shalt not make large deposits without first checking with your loan officer.
9. Thou shalt not change bank accounts.
10. Thou shalt not co-sign a loan for anyone.
If you are in the process of buying a home, remember that your credit must not change or be affected in any way until you actually sign the paperwork and get possession of your new home. Lenders will not only look into your credit when you first get pre-approved, they will check it again (and sometimes again and again) before they let you sign the mortgage. If you want to buy new furniture for your home or change jobs, just be patient. There will always be time to do it after the closing.
Sally K. & David L. Hanson, ABR, CDPE, CSS, e-Pro,ILHM, REDS
Thanks for sharing your Ten Commandments this morning. I had a deal go South because the person took a loan out for a car three days before escrow. It shot his DTI over the max. Bank pulled his credit day before closing.
I tell everyone not to spend a dime on furniture or anything for the house until it's their home. And never use your credit card for large purchases and certainly do not max them out. Thank you for the extremely helpful Commandments!
We had that happen once...however...I think it was a "make believe" car repair since the lender is not required to verify the expense that now turned their debt to income upside down...deceptive...oh yeah !
Seems common sense to us but as buyers they do not realize the little things that can turn the deal. Thanks for the info.
Sally and David, these are more or less commons sense. I think it has happened to all of though at one time. Buyers get caught up in the excitement of buying a home. Education is the key.
Common sense...you bet Michael...it is just the excitement...and not really having it occur to buyers that the silly little debt to income ratio may get them a leather couch instead of a house !
Great list. Many buyers don't realize that the lender will verify employment and credit just prior to closing to make certain nothing has changed that would adversely affect the closing.
Tooo many buyers think that the application is the beginning and the end...and more spending can BE the end to buying the house !