Congratulations! Your loan is approved, contract signed, and closing date is set. While most of the hard work is done and everything seems on track… the unthinkable happens that could result in saying goodbye to your dream home before you ever put the key in the door.
Here are some mistakes you need to avoid:
- Do not establish new credit! Every time your credit is pulled — it affects your credit rating… so WAIT. Don’t even look at it. You could make a harmless inquiry and end up delaying your closing.
- Don’t buy a new car… or take on any other new debt! Unfortunately, when you take on any type of debt you didn’t have at the time of the loan application, it could affect your debt-to-income ratio. Even smaller purchases associated with a new home can be dangerous. So avoid buying the new furniture and big screen TV you’ve picked out until after you close on your home.
- Don’t get behind on payments! Stay current on your bills — you don’t want to wreck your credit score just before your loan goes through. If you have a mortgage on your current property, missing a payment during this time could cause serious problems.
- Avoid changing jobs! Although job changes can provide better pay or advancement opportunities, it could delay your quest for home ownership. Lenders prefer a steady and consistent job history.
- Don’t close any credit accounts! It may seem sensible to clean up your finances by canceling unused credit cards and transferring balances to other cards to get a lower interest rate when you’re offered them. Don’t do it! This can be a bad move for your credit score.
- Don’t move big amounts of money! Before that home is definitely yours, don’t transfer amounts into your checking or savings accounts without checking with your lender before doing so. If they see large amounts of money moving around, they may wonder why and raise the red flag.
A Final Thought:
Remember, if you have any questions on the “do’s and don’ts” while buying a home, ask us, we are here to help you make your dream of home ownership a reality! —#TeamAmericanWay