Avoid These Five Mistakes Before Your Closing Day
Avoid these five mistakes before your closing day.
The purchase of a new home is exciting. And for home purchasers applying for a mortgage, the process can feel stressful. But you can avoid many pitfalls by being prudent throughout the loan process. From the moment you are preapproved, think of your finances as FROZEN. Even small changes in your credit profile can jeopardize your loan approval and you don’t need or want any surprises along the way. With this in mind, here is a list of five things NOT TO DO while you’re waiting to close on your new home.
1. Don’t change jobs.
Lenders look at your employment history to ensure you are financially stable and able to make your loan payments. It is best to stay with your current employer until you close on your loan – and that’s even if you have a chance to make more money with a new employer. However, if you are terminated and need to find new employment, be sure to keep your lender abreast of your employment changes.
2. Don’t take “same as cash” loans or open zero interest credit card accounts
Do not borrow, finance or otherwise purchase furniture, appliances or other goods prior to closing on your home loan. “Same as cash” or zero finance charges are so tempting. Unfortunately, the additional debt will offset your debt-to-income ratio. Your credit score could drop which might not stop a loan – but could increase your interest rate.
3. Don’t Buy a Car. Don’t do it!
We beg of you. Do not, for any reason, purchase a vehicle while you are waiting to close on your loan. A car purchase significantly impacts home-buying plans. Your loan pre-approval is based on the state of your credit and the amount of debt you owe. A car purchase will significantly disrupt your overall credit picture. Not only will your debt to income ratio increase, a car loan will involve credit pulls – both of which can negatively impact your final loan approval.
4. Don’t Be Late Paying Your Bills.
The loan approval process is a dynamic process. Lenders look at your credit multiple times throughout the loan process. It is imperative to keep your payments up to date and on time for all of your loan accounts. That includes existing house payments, car payments, and credit cards. And again, don’t transfer debt or take out any new credit card debt – even if it is zero interest for a set amount of time.
Don’t Spend Money You’ve Saved. Dedicate it to Closing Costs.
Avoid temptation. Buying a home can be a stressful process – it’s a large purchase. Be mindful of the money you’ve saved for your down payment and closing costs. Realize that there are significant costs associated with a home purchase from all kinds of fees related to closing, to insurance costs, land surveys, appraisals, etc. Don’t get caught short. When it comes to finalizing a home loan, timing is everything. Be careful not to spend the monies you’ve saved while waiting for your home loan to close.
Coastal Loans
Holiday Builders works with Coastal Loans, our lending partner. Coastal Loans is a joint venture between Acrisure Mortgage and Holiday Builders. Coastal Loans is familiar with building practices and new home construction. A team of Loan Originators services Holiday Builders’ customers exclusively. For information on loan products, current interest rates and the application process, visit Coastal Loans.
Holiday Builders New Homes
Holiday Builders builds new homes throughout Florida. Choose the Nature Coast, the Space Coast, the Emerald Coast or the Treasure Coast and more. We’re building new homes and new communities in very desirable locations. New home construction is a great value. Visit HolidayBuilders.com for a complete listing of our move-in ready homes. Check out our buildable floorplans. Try using our Interactive Floorplans to design your next home. We can’t wait to help you get into your new home.
Tags: closing costs, coastal loans, credit score, debt to income, loan approval
