Home Buyers – Hands Off Your Credit While Your Home Search or Loan Is Pending!

  • July 16, 2013
  • devinlucas

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.  

-Devin Lucas

Author Devin R. Lucas is a Real Estate Attorney, Broker and REALTOR®, specializing in Newport Beach, Costa Mesa and Orange County, serving individual, investor and small business interests in real estate.  Active with the Newport Beach Association of REALTORS® and Costa Mesa Chamber of Commerce, Devin R. Lucas Real Estate is an independent real estate brokerage and law practice located in Newport Beach, California.

Devin R. Lucas Real Estate
Real Estate Attorney | Real Estate Broker | REALTOR®
devinrlucas.com | devin@devinrlucas.com | BRE No. 01912302
949.478.1623 office | 888.667.6038 fax

2901 West Coast Highway Suite 200
Newport Beach | California | 92663-4023

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