You might be tempted to just pull out your credit card and charge the purchase, or perhaps push it onto a new account.  The plan is to have the installers on their way as soon as you have the keys.  Perfect, right?

Or maybe you need a new car.  You have budgeted for it, but wanted to have your mortgage loan approved before you made the deal.  Good strategy, correct?

Wrong, wrong, wrong! Fannie Mae’s new rules go into effect June 1 (though lenders have the discretion to put them into play at once) that require lenders to pay more attention to changes in your credit report from the day you applied until the day you close.  They must refresh your report to see if your credit balances have changed or if you have acquired a new debt.  They must even check out credit inquiries to see if you succumbed to that persuasive furniture salesman and are obligated to pay back a ‘new’ loan.  Lenders now have access to new fraud detection tools that can determine if you are trying to work around the system or if you have undisclosed debt.

For some borrowers, a bit of additional debt might not make much of a difference, but for most people, it could delay closing. Worst case?  The bank decides against approving the loan, altogether.

If you are buying a home, be forewarned and plan accordingly.  Pay cash for what you need!  If you want to preserve your cash until after closing, wait until then to buy.  If you really can afford the new purchases or the new car payment, or want to take advantage of a 30-60-90 deal or deferred billing, wait till you have the keys in hand.  Don’t even let the store run your credit to see if you qualify.  If you need carpeting installed or want some other project completed before you move in, plan a little slack in your moving schedule.

As exciting as the offers around may seem, you might want to gauge and rethink giving your new refrigerator a home, before you’ve closed on yours!!

Looking for the perfect affordable home in the DC area, including Maryland or Virginia?  Express Realty Services has a great selection of homes to fit your budget.  We can even show you our latest remodeled and renovated homes from our sister company, Express Homebuyers!  Call today or visit the Express Realty Services website.

A new policy announced by HUD Secretary Shaun Donavan lifts the restrictions for buyers who are likely to buy HUD-owner properties, bank-owned properties, or homes purchased directly from sellers with an eye to “flipping” them—rehabbing them and putting them back on the market.  The move, effective for one year starting February 1, 2010, was approved to aid the current foreclosure crisis.

The theory is that the move will get homes in the hands of owner-occupants more quickly, which will in turn, aid neighborhood stabilization. Not only are empty homes often an eyesore, but they pose safety hazards and are an invitation to vandals to drop by and strip them of wiring, plumbing, and appliances.  The new law allows “flippers” to fix the homes and take their money and run, after selling the home to someone unlikely to qualify for traditional financing.

Given that the current housing stock is increased daily with bank-owned homes and other distressed properties, this gets the properties in salable condition more quickly.  Many buyers who are attracted by the lower prices attached to distressed properties are often unable or unwilling to do the renovations need to make the house livable.  Once the home is fixed up a bit, buyers are more interested taking the plunge.

The new program has some restrictions intended to prevent abuse:

• No sales to little Timmy or to Uncle Bob—sales must be arm’s-length.
• Lenders must meet certain criteria if the home is being sold for more than 20% of the seller’s acquisition cost.
• Only works with forward mortgages.
• Doesn’t apply to Home Equity Conversion Mortgages (HECM).

In the past, “flipping” acquired a bad name, as investors would resell homes at inflated prices to unsuspecting buyers.  When the homes, often barely renovated, were then financed with high interest loans, buyers were left with worthless properties and high mortgages.

For more, information, read the full text of the new policy at the HUD website, then give Express Realty Services a call if you are interested in buying or selling. express Realty Services guarantees to sell your home in under 60 days, or we will buy it.