Who are “they” (and why did you listen to them)?

A few years ago, I represented buyers purchasing their first home. They found the home they wanted, had their offer accepted, signed the contract and waited for the mortgage lender to approve the loan so they could close. This final step was going to take a while so they took a vacation they had been planning for some time. When they returned, they would close on the house and start working on the upgrades they wanted to make. They took their vacation and a few days before they expected to close, the husband – let’s call him Fred – called me to say he could not buy the house.

“Why, what happened?” I asked. He explained that he had received the approval from the bank but the loan was going to be at a higher interest rate which would make his monthly payment more than he believed he could afford. The lender had checked his credit one more time and the new credit report was the reason why the interest rate for the loan would be higher.

I asked him what might have caused his credit score to change. Well, in addition to incurring the cost of airfare to take his wife and children on a trip to another country, he had opened three new credit card accounts. “They told me if I had more credit cards my credit would improve.” To which I replied, “Who are ‘they’? The loan officer? His attorney? I knew it wasn’t me. “My friends,” was the answer.

They buyers had a mortgage contingency in their contract. It meant that if they were not approved for a mortgage, the contract would me cancelled and they would get their “earnest money” back.

But the lender was not denying them a mortgage. They would get their loan but at a higher interest rate. There was nothing anyone could do and they had to buy the house.

But that is not why I retell that story here. The moral of this story is: You are making what may be the largest purchase of your life to fulfill your dream of home ownership. You have a team of real estate professionals working to make that dream come true. So why would you listen to anyone not on that team? If you are in the process of buying a home or just thinking about it, talk to a loan officer recommended by a licensed real estate salesperson or associate broker who can vouch for the loan officer’s experience and commitment. That loan officer can advise you on what to do or not do to maintain or improve your credit worthiness. You will find one lender’s list of credit rules here.