Condominium/Real Estate Law Blog
Change in Finances Prior to Closing on Real Estate Could be Costly
Posted by Jeff Barnes on January 18, 2012
Lenders make financial decisions to lend money to borrowers in real estate transactions based on many different criteria, including debt to income ratios. So, if you submit an application for a mortgage and after submitting such an application and prior to closing, you purchase new appliances on your credit card or finance/lease a car, this could substantially impact your credit score and debt to income ratio to the point that a mortgage that was once approved is no longer approved. The risks in being denied the loan to purchase the real estate may not just be not being able to purchase the real property but also may result in you forfeiting all your deposit money if the mortgage contingency has expired as well as the costs you expended during the due diligence period of the real estate transaction.
Feel free to contact us if you have questions about this or any other issue related to real estate law.
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