In this episode i explain the importance of not making large purchases on your credit card during the escrow period.
Hello everybody and welcome to another edition of the Reside Daily Bite; I’m your host, David Doucette and Happy Friday! It’s Friday, I’m always excited on Friday. Yesterday, I received a newsletter from the California Association of Realtors. They send out a newsletter once a week on Thursdays and they had a really good, simple, easy tip that I wanted to pass along specifically for home buyers.
And what they talked about was homebuyers waiting for a mortgage loan to fund are advised to be conservative when it comes to buying new furniture, appliances or the like for the house they are purchasing. So, if you’re in escrow and you’re waiting for your loan to fund, it’s advised to not go out and start charging on your credit card large purchases such as furniture, such as that new refrigerator you’re drooling over, such as that new stove, that new range. Do not be making big purchases during this process, you have to be patient and wait a little bit and here’s why.
It has become standard practice for lenders to check borrowers’ credit scores in the weeks leading up to the closing, sometimes, even the day prior to the closing. These large purposes can use up a considerable proportion of a borrower’s total credit limit which then can lead to a drop in the buyer’s FICO score, which then possibly changes the terms of the loan. And we know there’s more paper work involved in the long process; we know lenders are scrutinizing more things; they’re taking longer to look at things and approve some of these items. So, by all means keep it conservative when you are in escrow and waiting for that loan to fund. If you can wait on making those larger purchases, definitely wait.
That is it for me today, if you have any feedback: 1-800-476-5579 -you can call that feedback line 24/7. You can also email me email@example.com. Happy Friday! My name is David Doucette, thanks for checking out the Reside Daily Bite.