I just went under contract for a new home and I would like to purchase new furniture on credit; could this cause a problem before closing?

Mar 13th, 2013 | By | Category: Question of the Month

Borrowers – Watch NEW Debt Before Closing

Whether you are buying a home or refinancing, Buyers/Borrowers should never accumulate new debt while in the process of closing a transaction. Lenders consider factors such as debt ratio, which is the ratio of debt to income, and credit score to approve loans. Lenders will recheck the financial situation of Buyers/Borrowers prior to the closing, especially if the transaction takes a long time to        process; for example, a short sale purchase. If credit reports are pulled several times in a short period, the credit score can decrease even more because the Buyers/Borrowers now appear to be a risk to the Lender. It may be very exciting to buy appliances or new furniture in anticipation of moving into a new home, but the Buyers/Borrowers should always wait until after the closing to do so. Applications for new credit cards should be avoided as well. Lenders will  re-check and verify bank account balances prior to closing.

Information compliments of First American Title 101 S La Canada Suite 24 Green Valley, AZ.

 

Leave a Comment