First Time Home Buyer Disaster- Don’t Let This Happen to You!
December 28th, 2007categories: Chico Buyers, Chico CA Real Estate News, Chico Financing
Don’t mess with your credit or change employment until your Chico escrow closes!
While perusing a fellow blogger Janis Gagliardi’s recent post it occured to me that the message bears repeating for potential Chico CA buyers.
Here is the full story, courtesy of PortOrangeJuice.
I myself have had two different buyers in the past year or so that were stopped cold in their path to purchasing a new home. In a nutshell, the escrows had progressed to within a day or two before the closing. In both cases, the lenders re-checked the buyers credit and employment status just minutes prior to funding the loan.
1. The first couple had just charged new appliances to their credit card the day before. In doing so, they knocked their qualifying ratios out of whack just enough to destroy their loan package.
2. My second buyer either quit her job or was fired on Wednesday.When the lender checked with her employer on Monday, all bets were off! No job, no loan.
Apply Janis’ tips to ensure you close escrow on your Chico dream home!
DO NOT increase your credit card balances and or loan balances
- DO NOT apply for additional or new credit, or put balances on a paid credit card
- DO NOT ignore late payments and/or collection notices that during the course of your loan
- DO NOT purchase anything that is “the same as cash” – it will show on your credit report as a debt
- DO NOT buy furniture, cars, or appliances until after closing. What good is furniture if you don’t have a new home to put them in!
- DO NOT lend money to family members, friends, etc. if you need it for closing.
- DO NOT store your money at home. Place it in a bank account so that it can be documented as savings throughout the loan process.
- DO NOT have overdrafts on your checking account.
Thanks for sharing my story with Chico Buyers! Our obligations as Realtors far surpass just finding homes that suit our clients needs. We have to be sure we properly inform our buyers in all aspects of a real estate transactions including the financing aspect.
Sandi - This is one thing I make sure my clients understand when we have a home under contract. Unfortunately, sometimes they think they are home free too soon.
Janis- Thanks for such a great story! It deserves to be shared
You are correct in that it is our obligation to inform them… sometimes they just don’t want to hear what’s best for them!
Paula- I think you hit the nail on the head: they think they’re home free, when really they are only on the home stretch. As they say, it ain’t over till it’s over! Don’t mess with your credit or job until escrow CLOSES.
Paula truly wrote a great article on this subject. Good move Sandy sharing this information with your Chico real estate buyers. Most buyers don’t even think about these things when buying a home.
Fantastic reminder to buyers. I have had several similar stories. The credit crunch makes these points even more important. Underwriters are much more critical these days. I think I will link to this article.
Thanks, Marty
Thanks Sandi for a very informative post- perfect for first time home buyers, really any Chico or Charlotte home buyer. Terry McDonald