Business

When you find the loan and the house, but then you lose your job

DEAR MR. MYERS: My wife and I were pre-approved for a mortgage in October and signed a contract with a developer to buy a brand-new home in mid-November. On Dec. 1, though, I was given notice from my employer that my job would be eliminated early next year. We’re now worried that we won’t be able to make the payments on the new loan unless I’m able to get a comparable job quickly, so we’d like to cancel the sale before it closes and get our deposit back. Can we?

ANSWER: Yes ... probably.

Most development firms are made up of honest, understanding folks. If you explain your predicament and provide documentation from your employer that your job will indeed be eliminated next month, the builder will likely agree to cancel the sale and return your deposit rather than risk that you’ll move in but then quickly fall into long and costly foreclosure proceedings because you can’t make the monthly payments.

It’s also important to remember that nearly all real estate sales contracts today contain a boilerplate clause that states that buyers can cancel a deal and get their deposit back if they cannot find suitable financing to complete the transaction. So, even if the builder won’t treat you fairly, you can notify the lender about your financial quandary and the bank will be more than happy to rescind its original loan pre-approval. The recession would then give you the legal ammo to cancel the pending sale and to get your deposit back.

If neither of these moves proves successful, you’ll probably have to hire a real estate attorney to help. No one likes to pay a lawyer hundreds or even thousands of dollars for legal services, but it’s a lot better choice than closing a deal for a home that you might lose soon after.

Good luck. I hope that your cloudy financial situation clears up soon.

REAL ESTATE TRIVIA: The median price of a newly built U.S. single-family home in October was $304,500, the Census Bureau reports, up from $298,700 one year earlier.

DEAR MR. MYERS: I am about mid-way through the process of refinancing my home loan, but I bounced two checks last week for reasons that I’d rather not disclose. Will this send my credit score lower and ruin my chances of completing the refinancing?

ANSWER: No. Bounced checks and overdraft fees are not reported to the nation’s credit bureaus, so they don’t have a direct impact on a consumer’s credit score.

However, if you fail to promptly “make good” on the bounced checks and the recipient or bank turns the matter over to a collection agency, the agency will report its collection activities to the bureaus and your credit score will suffer.

DEAR MR. MYERS: We’d like to buy a new TV for our living room. Would we save money by getting one now, during the holiday-sales season, or by waiting until after the New Year begins?

ANSWER: It depends on how finicky you are. If you have your heart set on one particular brand and model of a television set, buy it now if it’s on sale. The most popular models sell out quickly and usually are gone by the time New Year’s Eve arrives.

Conversely, if you’re not choosey, wait until after the clock strikes midnight to usher in 2017. That’s when retailers slash prices of less-popular 2016 models to clear space for the fancier, high-tech TVs that will debut at the trend-setting Consumer Electronics Show in early January.

Hand-held power drills and other home-improvement items already are at some of their lowest prices of the year, largely because they make great holiday gifts for do-it-yourselfers.

You can save even more money if you don’t buy certain household items now, but instead wait for the after-holiday sales.

Most new furniture lines will make their way into showrooms in the first few months of next year, so retailers will likely slash prices on their 2016 models soon after the holidays are over. Also, delay buying exercise treadmills and other home-gym equipment: The best deals on such items usually are offered in February or March, when retailers are anxious to move inventory that was left over by all those folks who resolved to get fit and lose weight on New Year’s Eve but never got around to buying the needed gear.

David W. Myers’ column is distributed by Cowles Syndicate Inc.

  Comments