Monday, July 26, 2010

Home Buyers - No major purchases until after closing

Many people are snapping up the lower priced foreclosures here in Florida. Many of them also want the new car in the driveway and the new furniture to go in the house. All of that is fine but just wait until you have the house keys in your hand before you start adding to your debt.

The lender may look at your credit report 1-2 days before closing and there is a good chance that you will no longer qualify for the loan if you have indulged yourself and run up the charges on your credit car.

A significant part of the loan approval process is the calculation of "debt-to-income" ratios. If your total monthly debt is more than 43% of your gross monthly income, you stand a very good chance of not being approved for the loan and, if you were previously approved, it may be retracted.

So watch what you spend and don't make any major purchases until after closing.

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