Buying a house? Don't buy a TV before closing

Lenders are monitoring your credit profile from the time you apply for a mortgage until after the closing. Even inquiries about new credit could endanger your loan.

By Teresa at MSN Real Estate Jul 19, 2013 1:22PM

(© Alex Stojanov/Alamy)Last winter, as I waited to move into my new rented home, I ordered a flat-screen TV, to be delivered to the new place. I paid for it with a credit card. It seemed efficient.

 

If I had been buying, an expensive electronics purchase could have stopped the whole deal.

 

If you’re buying or refinancing, you may have all kinds of plans for furnishing and decorating your new home. But as eager as you are to get started, you should not do anything that will affect your credit until after the closing.

 

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Since 2010, Fannie Mae has mandated that lenders make sure that borrowers have not taken on additional debt since they filled out their applications. If your credit picture has changed, that could put your approval in jeopardy, as could changing jobs. Shopping for cars, even if you don’t buy one, isn’t a good idea, either, if your credit report is going to reflect inquiries from car dealers or credit unions.

"We tell our clients about this upfront and keep reminding them through the entire process not to go buy a new bed or a refrigerator," Michael Daversa, the president and founder of Atlantic Residential Mortgage in Westport, Conn., told The New York Times. "What you’re supposed to do is keep everything status quo."

In many cases, lenders are doing more than a simple pre-closing credit check. Most are monitoring your credit 24/7 once you apply for a mortgage, syndicated columnist Kenneth R. Harney reports. A service offered by Equifax and used by lenders "can even detect subtle hints that a home purchaser is planning to add on new debt before the closing," Harney wrote.

This issue is most important for loan applicants who barely meet the standards for the allowable amount of debt. But, to be on the safe side, even those with pristine credit and low debt should wait to shop for furniture until after the loan has closed.

Tags: loans
 
14Comments
Jul 27, 2013 8:07PM
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Credit reporting agencies have too much power over our lives.  They should be abolished for the evil that they are.  The only companies that are worse than credit reporting agencies are collection agencies...same species of slime.
Jul 27, 2013 4:48PM
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from now on i'l totally have a goal for homeownership to only pay in cash.

and all I really want is a small wooded cabin in the mountains with huge trees and mountain views

i'l probably never reach it but it's nice to have a dream

Jul 27, 2013 1:18PM
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Assuming guilt and assuming the credit report is correct gives all the power to the lenders.  Fraud by lenders is the biggest problem I have encountered.  Then, it is virtually impossible to get it cleared from the credit reports without a law suite.  The standard ploy is to say "Pay the debt and I'll report it on the credit report".  That would assume they hadn't committed the fraud, and I won't back down.  I finally gave up on the system and don't use credit anymore.  No cards, no mortgage, and no more thieves in my personal business.
Jul 27, 2013 12:26PM
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And you all thought the NAS was invading your privacy...........
Jul 27, 2013 9:03AM
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Like I've said before, all this credit bureau stuff and credit monitoring is a bunch of CRAP!
Jul 27, 2013 6:41AM
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I want to buy a house, but cannot get a mortgage.   Banks are too tight.

Jul 26, 2013 11:28PM
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Just another example of how you really have no privacy in this world today in just about anything. While this may be a justified intrusion as stated whats to stop them from continuing monitoring you like forever? You can fine many more instances of this type of behavior  out there if you look for it and in total it makes what the government does seem small.
Jul 24, 2013 3:36PM
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What a joke.  If a tv stops me from buying a house i don't need the house or the tv.  Only in america.

Jul 24, 2013 7:32AM
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If $500 more in credit utilization prevents you from buying a house, then you are trying to purchase too musch house. 
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