You're In Escrow - DONT BUY A THING!!

I was reading this morning, I'm so typical, and came quickly across an article in the LA Times Real Estate section about some changes in credit search and standards for loan applications.

Here is the link to the story:

New Debts Could Affect Your Mortgage Terms

I just thought it was kinda of funny. Haven't we been telling our clients for years that once you're in escrow and the loan has been approved....Don't Buy A Thing!

Before we start looking for homes together, all my clients must discuss financing with a lender, bank, broker. Need to be sure they can buy the home they want. Needless to say, that banker must look at a multitude of items for their loan application. One being the buyers debt. And, the debt to income ratio.

The buyers get their loan approved, terrific! But, and a big but here, banks check towards the end of escrow to make certain that no additional debt, or hidden debts, are discovered. Because why? That would, of course, change the debt to income ratio.

So, don't ignore your Realtor when they tell you that you can't go buy new furniture, or that big Television before close of escrow. Don't start applying for new credit lines either. The banks don't want to see changes on your credit. They want to see the same buyers debt to income ratio at the end as they did when they originally approved your loan.

Really, just be patient.....it is a virtue after all!