Shopping Spree could Stop your Home Purchase

Posted January 12, 2008

Wow. You are almost there! You have been pre-approved for a mortgage and located just the right house. Your offer to purchase was accepted after some further negotiations over the house’s price.

You submitted your offer to purchase to your mortgage lender and all the income documents he requested. The home inspection went well and the home appraisal came in over what you offered!

The lender has submitted your loan to underwriting and you are simply waiting for final approval so you can close on your home… your dream is almost real!

Only a few more things to do before closing… you need new furniture and bedding. Oh and that car needs to be replaced. After all, you will need to make sure you can get to work to pay for this home, right?

So closing is next week, so you should go get all of this other stuff done this weekend so everything is ready for move in day, right? WRONG!

Don’t make that mistake. Going on a shopping spree just before closing can cost you more than you bargain for, including your home. Many lenders will pull credit once more just before issuing a final approval and sending out loan documents. If you have gone out and maxed out your credit cards, or taken out new loans, the lender will re-evaluate your debt to income ratios. In other words, they will want to make sure you still qualify for the loan. And that could kill your chances of buying a home!

When you are buying a home, don’t buy anything else until the ink has dried and the papers have been filed at the courthouse! Once that has happened, the lender will release the money to all parties. THEN, and only then should you move on to updating the car, the furniture and all the other planned shopping.

One last bit of advice… even if you get to the end and you have closed on your home, don’t go putting yourself into major debt trying to fill it. You will be bound by the debt and unable to enjoy your home. After all, the gradual filling of the rooms is what makes a house a home!

Enjoy your new home.

Ed Nailor, Mortgage Specialist

Category Posted in Buying a Home, Credit Tips, Mortgages