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News: President's Columns: New Home Purchases...Word to the wise prospective homebuyer: Hold off on major purchases until after you close on your home By __________________________ (Board President's Name Here) 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 buys 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 the ______________ Board/Association of REALTORS office or call a local REALTOR. They'll be happy to help you budget for your new home, and when you're ready, happy to help you find it.
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