You spent months, maybe even years, saving for a down payment, repairing your credit, and getting ready to buy a new home. Looking through the available inventory, getting pre-qualified, and viewing homes were both nerve-wracking and exciting processes.
Now you’ve put in an offer and the seller accepted. It’s time for your loan officer to do their part and get you financed. You know there’s a lot you need to do to buy a home, but there are also some golden rules you should never break. If you do any of these ten things, you could delay your close date or kill the deal entirely.
Change Jobs or Become Self-Employed
Your loan approval rests, in large part, on stable and verifiable income. Change jobs now, and the entire loan process has to start over again. Now you’ll be waiting until you can show income over weeks or months before you can be approved again. In the meantime, your dream home will go to someone else.
Buy a Car, Truck, or Van
You might have the cash for a big down payment and the credit to justify financing a new car but hold off. When you take out a new loan, your loan officer has to re-assess your debts, expenses, and income again. You’ve slowed down the process and the seller may not be willing to wait.
Use Your Credit Cards a Lot or Make Late Payments
Getting your credit clean isn’t the only step in the buying process. You have to keep it that way, too. Put away your credit cards and make payments on time like it’s your job. It is, as a responsible adult, and while you’re waiting to buy a house. Don’t give a lender any reason to doubt you’ll be able to afford or pay your mortgage.
Spend Your Closing Money
You've set aside what you need for the down payment, the closing costs, and extra savings for expenses and getting moved in. It's possible your lender told you to build a cushion of cash before they could approve you. Why? So your bank account wouldn't be emptied out because you bought a house. So please, whatever you do, don't spend any of that money before you get to the closing table! It affects your approval and delays closing until you build that total back up.
“Forget” to Include Debts and Liabilities on Your Loan Application
Leaving information off a loan application can kill the entire deal. If you think it’s not important, you’re wrong. And if you think the loan officer or underwriter won’t find out, wrong again. Either the application will have to be reprocessed which takes time or whatever you left off will make you ineligible for the loan. Say goodbye to the dream house you’ve already moved into in your head.
Finance New Furniture
This is like buying a new vehicle before closing. You’re taking on more debt, decreasing your available income, and potentially ending your opportunity to buy a new home. You may need furniture, and maybe you can afford the extra payment, but let it wait until after closing.
Make Large Deposits Before Talking to Your Lender
Your loan officer needs to document any unexpected money you might receive. Who’s money is it? Is it income? Where did it come from? Will it be used at closing? Numbers and tallies have to be readjusted. You may need to sign affidavits about what the money is and why you received it. Surprise your loan officer with this, and it will slow down or stop your closing.
Open Any New Lines of Credit
Inquiries into your credit for a new credit card, a new loan, new furniture (see above) dings your credit score. Right before closing, your lender will be checking. If your credit score drops, you could make yourself a credit risk in the eyes of the mortgage company. Goodbye closing and beautiful home.
Change, Open, or Close Your Bank Account
If you haven’t figured it out yet, your loan officer is keeping track of every penny you have for the closing and where it is. Your bank account history is important to help track your finances. Change this, and you may have to wait - like you would with a new job - to build that history again. Don’t expect the seller to wait that long. They’ll move on, and you’ll be back to step one.
Co-Sign a Loan for Anyone
You know you’re not supposed to take out any new lines of credit or finance a purchase, but co-signing is okay. Right? Wrong! By co-signing on a loan, you’re assuming responsibility if they don’t pay the debt. This alters your credit information and the lender’s ability to determine your ability to take on any more debt. Wait until after closing for this, too.
The short and simple rule when buying a home is don’t make a single change to your income, expenses, debt, or credit until you’ve got keys in hand. Hold tight on that new job, car, or furniture until after you move into your new home. And if you don’t have a choice but to make those changes, understand that it can and will affect your ability to buy a new home.
Are you ready to buy your new home? Let’s talk!