Hold Off on Major Purchases Until after You Close on Your Home

Lori Elswick, 2010 President, Lorain County Association of REALTORS®

Lori Elswick 2010 LoCAR President

Time and time again, it happens.

A young couple will find the house of their dreams. The perfect three-bedroom, two-bath bungalow, with hardwood floors, a shiny updated kitchen and room for a workbench in the garage.

The couple makes an offer, the offer is accepted and a closing date is set. They talk to a loan officer, who assures them they'll be approved for a mortgage on their dream home.
Then all common sense flies out the window. Two weeks before they're scheduled to close on the house, the couples buy a new Jeep, a new riding lawn mower and new leather sofa and loveseat. As if all that weren't enough, the husband quits his job and begins work for another company.

The couple seems surprised when the loan officer calls to tell them a final credit check performed three days before closing has uncovered the tracks of their $17,000 spending spree. And because of it, the loan officer tells them, they no longer qualify for the home loan.

A sad story, and one that happens all too frequently.

If there's one piece of advice I'd give to prospective buyers, it's to HOLD OFF ON ANY UNNECESSARY PURCHASES UNTIL AFTER YOU CLOSE ON YOUR HOME.

Most mortgage lenders use strict ratios of debt to gross income when they decide whether to award a mortgage loan. So, if you're thinking of buying a home anytime in the next year or so, try to pay off your credit cards and stay out of the car, furniture, appliance and decorating showrooms, at least for now. And save your money.

Trust me: you'll still be able to find ways to spend it, AFTER you're inside your new home.

For more information about qualifying for a home loan, call a member of the Lorain County Association of REALTORS®. They'll be happy to help you budget for your new home, and when you're ready, happy to help you find it.

The Lorain County Association of REALTORS® is one of more than 1,200 local boards and associations of REALTORS® nationwide that comprise the National Association of REALTORS®. The National Association of REALTORS®, "The Voice for Real Estate," is America's largest trade association, representing more than one million members involved in all aspects of the residential and commercial real estate industries.

The Lorain County Association of REALTORS® offers a website that provides a complete listing of REALTOR® real estate brokerages in Lorain County, contact information for REALTOR® members, and industry associates. If you are a first time homebuyer or a repeat buyer consider www.MyNewCommunity.net or www.LoCAR.org as a good source for Lorain County REALTOR® information.

REALTOR® is a registered collective membership mark which may be used only by real estate professionals who are members of the National Association of REALTORS® and subscribe to its strict Code of Ethics. Not all real estate sales agents are REALTORS®. All REALTORS® are members of NAR along with their State and Local Associations.