Getting a home loan today is getting harder and harder, and home buyers who are unprepared could find themselves homeless if they misbehave while applying for a loan. Lending institutions now check, double check and triple check their applicants until the very last day they fund their loans.
A recent first time newly wed home buyer found out the hard way, how banks fears of having another foreclosure is making them pull their loans at the very last minute. This particular loan applicant went through about 35 houses, wrote 14 offers, responded to 10 counter offers, and finally! his offer was accepted on first place! Since he had done all the prequalification for the loan, he was informed that he did not need anything else, except to wait for another 3 weeks to close the escrow. He was so happy, that he decided to go out and celebrate with a bunch of friends... bad idea!
After a few drinks with his buddies, they noticed a furniture store across the street from the bar, they decided to offer some advise and help him pick the right furniture and surprise his wife with his purchase. His friends assited him with a lay-out plan to buy a dining room set, a large sofa with a couple of recliners, plus of course a flat 40+ inch T.V. A small down payment was paid and a credit was established. (ouch!) The idea was to move the furniture inside the house when escrow closed and surprise the wife when she opened the door and finds that the house come in with new furniture... (good intentions though.)
Needless to say, the wife was very surprised! She did not even got to see the new furniture... or the house for that matter! because the bank called the day after signing to tell them that the previously approved loan had been denied! The bank had run one more credit check prior to funding and found out that the FICO score went down because of the new purchases. No matter how hard they tried to fix things up, they did not get the loan, they were lucky their landlord help them stay as renters where they lived.
While applying for a loan, stay put and do not spend a dime on credit! do not cosign for anybody, do not apply for anything that might generate even a simple credit check. Banks look at that behavior as bad business and will not hesitate to cancel everything on the mere suspicion that the buyer is not credit smart at such critical point.
The consequences for everybody involved in this transaction are devastating, a huge waste of time and money, that could have been avoided had the Realtor or Lender made a point to warn this first time buyer not to go shopping for anything while in escrow. I am making now this incident a must-tell story for all my buyers, it is a way to get this point across in a very clear and painful way, so they remember.
Antonio & Alexia Cardenas
"The Realtors In Motion"
CRS, GRI, E-Pro Certified. SFR (Short Sales, Forclosure Resource) Serving the east shores of the San Francisco Bay, Alameda county: specially the following cities: Castro Valley, San Leandro, San Lorenzo, Hayward, Oakland, Pleasanton & Dublin.
Visit us on line at:
www.listedbyantonio.com or call (510) 326-4263
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