Buying a Home? Don’t Buy Anything Else Until After Closing!

With many buyers being close to the maximum debt-to-income ratio with their financing, it has become critically important that once a buyer has begun the process of securing a mortgage they must exercise absolute restraint when it comes to making purchases of any kind outside the typical and essential living expenses.

Due to new regulations, lenders are now having to re-pull credit report information just prior to closing. Changes in your credit can result in a re-underwrite, the need for additional documentation, or suspension of loan closing.

This means no new cars, motorcycles, furniture, appliances, wedding rings, vacations, or anything else that could potentially edge the debt level to one that is unacceptable for the financial institution. Avoid the temptation to accept the "10% off your store purchase by applying for a store credit card today" sales pitch.

It may seem foolish, but this is happening often and it is delaying and ending real estate purchases. Realtors and mortgage representatives should advise buyers to wait. Once the property has closed, then they can go ahead and make that much-awaited purchase.

And above all else, this is no time to be changing jobs (30-day pay stub requirements are being enforced)!

Connecticut Buyers Be Aware!

Many first time home buyers in the state of Connecticut are using CHFA financing. Today I got a copy of a commitment letter on the CHFA loan on a two-family where I represent the seller. The buyer was to supply proof that he had attended the 3 hour landlord counseling. This was the first time the buyer or mortgage person had heard about this requirement-so closing will be delayed a week or so. Unfortunately, as I represent the seller, it was not my place to remind the buyer that this was a requirement of the loan; but you can be sure that in the future, I will be sure that all buyer agents will be reminded!!

So buyers, when you sit down with your mortgage broker, please be sure to ask about any require education that you must attend as a condition of your loan so you can get it done as early in the process as possible. Here is a quick summary of require education:

3 Hour - Homebuyer Education Class

CHFA's three-hour class provides an overview of the financial and practical steps involved in buying and maintaining a home for CHFA loan applicants under the Downpayment Assistance Program, the Homeownership Program and the Home of Your Own Loan Program. CHFA requires that applicants of the Downpayment Assistance, Home of Your Own Program, and Homeownership Loan Programs attend this class as part of their loan process.

8 Hour - Homebuyer Education Class

CHFA's eight-hour homebuyer class provides in-depth instruction on the steps towards homeownership to anyone interested in buying their first home. It is also mandatory for CHFA loan applicants under the Section 8 Housing Choice Voucher Homeownership Program. Individual financial and credit counseling sessions are also available.

Landlord Education and Housing Counseling Services

CHFA's Landlord Education and Housing Counseling Services provides, free of charge, an overview on the range of financial and practical topics that a homebuyer should understand before completing the 2-4 family homeownership process. This class is required for those purchasing a 2-4 family home under the CHFA Homebuyer Mortgage Program.

For Full information on CHFA education requirements, here is a link to the education section of their website:

http://www.chfa.org/Homeownership/for%20Homebuyers/Homebuyer%20Education/default.aspx