What Not To Do In Escrow
Last week I let you know what you can do while in escrow. This week I am going to share a story about what a friend of mine did while in escrow. It is a story which illustrates what one should not do while in escrow.
When I lived in Santa Rosa, CA, a friend of mine came into some money and wanted to purchase a home. He found the home of his dreams and was able to put enough down that he could afford the payments. This was before the housing bubble burst and property values were still increasing.
He could not wait for the home to close so he could move in. His loan was approved and he was getting closer to closing every day.
He found he had a little money left over so he decided to purchase that new truck he had always wanted on the Monday before closing. He did not think that anything could go wrong. The loan company had already pulled his credit report and all was well. Several people had told him that they never pull your report a second time, so he felt he was safe in buying the truck. He made a down payment on the truck and took out a loan for the balance. Two days before closing, the loan company that was financing his home purchase decided to pull his credit report one last time just to make sure everything was fine. They found the purchase of the truck which made his credit score go down and he did not qualify for the loan on the home.
He wound up with a brand new truck, no new home and his down payment forfeited to the seller because he defaulted on the loan.
Do not, I repeat, do not go out and buy that new big-screen HDTV right before closing. The loan companies are pulling a second report just before closing and you can lose your dream home as a result. Wait until the home closes and then buy that HDTV.