Re; Big purchases or changes prior to being approved for a Mortgage Loan. Will this situation help or hinder me????Please advise

Asked by Claudia1981, Los Angeles, CA Fri Feb 26, 2010

OK, Ive been trying to qualify for a home for over a year originally I was approved for 70k but the homes in that range were going for a whole lot more so I never got any offers accepted. Now I paid off my car and the furniture finance I had and am looking forward to trying again BUT I wanted to know if having 10 acres in Lucerne under my name right now affect me negatively when applying for a mortgage loan since I hear you are not supposed to make any big changes. I was going to pay off the amount due on them only $1200 and my dad wants to give them to me so before I make the changes I wanted to see if anybody could give me some advice since I dont want to do anything that is going to ruin my dreams of owning a home right now within hopefully the next 6 months hopeing to buy in Hesperia, Apple Valley, Victorville area. Any and all advice is welcome and greatly appreciated.
Thank you all!

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, ,
Fri Feb 26, 2010
Having the property may affect you because even if it is given to you (titled in your name), you have to pay taxes and insurance on that property. That debt may affect your income and the ability to qualify. I'd always recommend to hold off doing anything that may affect your ability to buy. You were smart to ask this question because it's something we don't think about asking clients when we pre-qualify them (do you have any other property in your name?). Another main thing is that lenders like to see assets after you buy. So, save the $1200 in your account until after you buy.
1 vote
, ,
Fri Feb 26, 2010
Claudia, you are asking a question about qualifying for a mortgage, so I would say to listen to the loan officers who have already responded, not real estate agents who have homes to sell. It sounds like the land purchase is not something that you really have to do, so why do it now? If your dream is to buy a home, not own 10 acres of land, that is what you should concentrate on.
1 vote
Monique & Joe…, Agent, Beverly Hills, CA
Fri Feb 26, 2010
Hello Claudia,

As long as the property is paid in full I don't see how it could hurt you. You might qualify for more too. On another note I do know of a development in Victorville that is offering in-house financing which might allow you to qualify for a little more. If you think that might be of interest to you, let me know.


Monique Carrabba
The Carrabba Group
Keller Williams Hollywood Hills
(323) 899-2900
1 vote
Carlos Orozco, Agent, RANCHO CUCAMONGA, CA
Fri Feb 26, 2010
Hi Claudia,
Keep in mind that most lenders are being very tight/strict in qualifying due to the current credit-crunch...But unless you have a rich BF or Daddy, you should try to keep your credit purchases/debts down! so you don't hinder your loan potential. Most likely if you have an experienced and knowledgeable Lender/ Broker/ agent they can advise you and direct you in the right direction, which is to get pre-approved for an FHA loan with a direct lender and work with a Realtor that knows the Market/area that you are interested in... I know the Victorville/ A.V. area and I own a property in VtVl and have relatives in Apple...and seen some great deals on home as low as $56k, call me or check out my website http://( for links to repo sites that can hopefully help in finding your dream home!?
Carlos Orozco, Broker-Realtor
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M.D.J, , Los Angeles, CA
Fri Feb 26, 2010
It sounds like the land is not currently in your name which then there is nothing to be concern about. Even if it is or will be the $1,200 owed you said could be paid off so worst case would be the property taxes that would have to be included for qualifying which was already mentioned below.

Good luck.
1 vote
Jacob Varghe…, , San Jose, CA
Fri Feb 26, 2010
Hi Claudia1981,

Big purchase is a relative term.

If you are serious about buying a home, you should wait till you buy your home. Paying of debit is good, but keep in mind you may need money for closing costs, down payments etc.

I can do a free credit check provided you fill my online application.. This is a secure website and no information will be not sold or traded to others. I am Loan Officer and will do the loan myself. I do loans only in California. I am a financial guru.

Please go to my website and click on Secure Loan Application.

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1 vote
Hope Gillis, Agent, Whittier, CA
Fri Feb 26, 2010
My name is Hope Gillis, I am an realtor with Coldwell Banker Alliance.
In answer to your question,
The lenders run your credit so you can be pre-approved.
Then they run just before clsoing your transaction again.
No, you should not make any large purchases that effect your debt to ratio score.
Paying off anything you owe is a plus, keep records.
Owning another property will show as a liability and a debt unless it is paid in full or show income, or you have enough income to cover the debt each month.
I sell all over California, so if I can be of any assistance, please let me know.
I am not a lender and rules change daily it seems, always a good idea to make sure you have a good lender in place and have everything in line with them before you start looking for a purchase.
Hope this answers your question.............

Hope Gillis
Coldwell Banker Alliance
562-652-0079 Cell
1 vote
Nicholas, , San Francisco, CA
Fri Feb 26, 2010
It could affect your qualifications for a new home, as if you own land, you would owe property taxes on the land, which would affect your debt to income ratios.
1 vote
Fred Glick, Agent, Mountain View, CA
Fri Feb 26, 2010
Hi Claudia,

Without know your entire situation (income, bank balances, monthly payments, credit score, sale price of new property, taxes, etc) it is impossible for anyone to tell you exactly what makes sense for you.

I am happy to go through that with you, no obligation. Call me at 310-741-7179

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