Sarasota real estate – one home-buying mistake causes Diane M. of Sarasota, FL, to lose the keys to her new home…while in escrow.
No question, buying a house might just be the single most expensive purchase you ever will make in your lifetime.
Before you jump into your vehicle and race to all of the Open Houses, stop what you’re doing and PLEASE do not repeat the costly mistake one such Sarasota, FL, house hunter made.
Diane M. had no clue what she did during escrow would crush her home-buying dream. More than once, I have heard from house hunters who also have lost the keys to a home they were in escrow to acquire. Apparently, (some) home loan and real estate professionals are forgetting to advise buyers against this tragic mistake.
Click Read More below now for Diane’s shock & horror over losing the keys to her new home. PLUS, discover the 10 home-buying tips for avoiding losing the keys to your new home.
DIANE’S BIG MISTAKE
Please do not repeat Diane’s costly error!
As Diane waited to near on her new property, she was anxious to replace the older, dated kitchen appliances with new stainless steel appliances. She also planned to replace all window treatments. To become ready for these new additions, Diane rushed out to purchase appliances and window therapies, totaling $3,724.00. Diane did not know this was an enormous error. She did not know to refrain from making significant purchases during escrow.
She claims no one told her not to do this during escrow. Turns out, Diane’s credit score utilization soared, dropping her credit scores. What this means is that Diane did one of two things:
- She utilized a bank card that doesn’t report the credit limit to the credit score reporting agencies. Therefore, any charged sum would appear to be maxing out the bank card. For instance, the $3,734.00 appeared to be 100% of her credit limit;
- Diane’s combined $3,724.00 purchases pushed her credit balance beyond 30%, dropping her credit scores enough to miss the bank’s minimum score requirement. What few people comprehend (specially with new mortgage loan underwriting guidelines and practices) is that home loan underwriters verify every thing. Even instantly after providing loan commitment, thereby agreeing to lend Diane the cash to obtain a house the bank’s underwriter typically will pull credit score immediately ahead of funding to confirm a borrower’s credit ratings still falls within recommendations.
When the property loan underwriter detected Diane’s credit scores had dropped below the minimum credit requirements, the home loan banker retracted Diane’s loan commitment, killing Diane’s opportunity to buy a house. No amount of screaming, pleading, begging did anything to help. According to Diane, her mortgage loan person and actual estate agent never said something about this – apparently neither told her nor emphasized this point well enough.
Bottom line: Diane did NOT grab the keys to her new home!
To begin your house-hunting, PLEASE get approved for a mortgage before jumping in your car. Choose an experienced, proven mortgage professional, who’s either a loan officer (works at a bank) or mortgage broker (who “brokers” mortgages from many different mortgage companies).
- Start with pulling your own credit reports from each of the 3 credit reporting agencies: Experian, Equifax & Transunion. To get the best mortgage (rate & terms), you need good credit scores.
- Review all 3 reports for you and your partner/spouse if both of you need your income to qualify. Do this at least a few months before house-hunting so you’ll have time to address and resolve any credit issues. By far, this is the number one frustration I experience with first-time home buyers. They’re excited to grab the keys to their new home, not fight with credit reporting agencies on inaccurately reported credit.
Don’t commit the same mistake Diane did. As soon as Diane received “loan commitment” from the mortgage bank, she ran out to buy new appliances & other “stuff” for her new home, totaling $3,724.00. Diane claims no one told her not to do this during escrow. Turns out, Diane’s credit utilization soared, dropping her credit scores. When the mortgage underwriter detected Diane’s credit scores had dropped BELOW the minimum credit requirements, the mortgage banker REJECTED Diane’s loan commitment. No amount of screaming, pleading, begging helped. For some reason, Diane’s mortgage pro apparently didn’t tell her or didn’t emphasize this point well enough. Bottom line: Diane did NOT grab the keys to her new home…to her utter horror!
What is your #11 tip to add to this list? Please share your tips, questions & comments below. If you or someone you know wants/needs to buy or sell in or around Sarasota, FL, please contact me.
Sarasota real estate agent Mike Payne helps buyers (especially relocation buyers outside of Sarasota, FL) find & purchase their primary, vacation or investment property. Mike also helps homeowners avoid foreclosure. As well, Mike and his team utilize strong Internet Marketing skills to help sellers present their Sarasota homes for sale to buyers throughout the world, not just Sarasota.
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