Costa Mesa, Newport Beach and Orange County home buyers – in today’s tough lending and underwriting climate, it’s routine for lenders to check, double check, then check again your credit, employment and income. In other words, the “pre approval” is hardly the final check. Your lender is likely (in fact, required, if through Fannie Mae guidelines) to re-check your credit prior to closing.
Some buyers have lost the homes they were in escrow to purchase for minor issues such as putting new furniture on the credit card, opening new credit lines with home improvement stores, etc., prior to the close of escrow or recording of the deeds (i.e. when you actually own the home). Even a minor adjustment to your available credit, credit scores, income/debt ratio, etc., can cost you your dream home.
What’s a buyer to do? Simple – don’t do anything with your credit! Hands off! No new cars, furniture, department store charge cards, or anything! While your routine purchases are likely okay, certainly avoid anything abnormal, and talk to your lender about specifics. Consult your lender with any questions and certainly prior to any potential purchases. While this may disproportionally impact buyers who are closer to the edge of approval, those with substantial incomes are not immune from today’s strict requirements. If you have a change in employment, you should immediately consult your lender.
Bottom line – Hold off on any major spending and avoid taking out any new credit while you’re searching for a home or in the escrow process. There will be plenty of time to decorate once the home is yours.
2901 West Coast Highway Suite 200
Newport Beach | California | 92663-4023