So you’ve found your dream house and the seller accepted your offer. You are on cloud nine and can hardly believe that in a few short weeks you will be moving into your very own home. This is a great feeling, but unfortunately there are a few mistakes that will derail your path to closing and could cost you your dream home.
- Hold off on any big purchases
Your offer got accepted and you will be moving into your new home within a few weeks, so its only natural to get excited and want to buy new furniture for your new home, right? This move could actually cost you your new home, as your credit is being closely monitored right up until closing. A big purchase, such as new furniture or a new car, will throw off your debt-to-income ratio, and that’s something banks will take into consideration and may even reconsider your mortgage.
- Don’t open new credit card accounts
The same rule applies with credit cards. Any new debt will be factored into your ability to pay your mortgage, even if you got a great financing deal on your new furniture any don’t have to make any payments for a year. Your lender will still take those future payments into consideration and re-evaluate your ability to pay the new mortgage. According to Market Watch, an ideal debt-to-income ratio is no more than 28% of your house payment.
- Don’t close any accounts
While it may be tempting to clean up your finances by closing any old or unused credit card accounts, don’t do it. Closing any accounts will negatively affect your credit score, and during the home-buying process you and your finances are under a microscope, so any small change could cause a big delay or even the loss of a mortgage.
- No sudden changes
Lenders are not big fans of unpredictable income, even if that unpredictable income is a bigger paycheck from a new job. If you are offered a promotion or a new job with a better salary during your home buying process, tell your lender right away so that they can help you get the new, vey important financial information they need right away. If you can get a letter from your new employer confirming the security of your new job, even better. Lenders don’t like sudden changes, but if you have to make a change in the middle of closing on your dream home, be proactive and communicate often with your lender.
Sarah & Tim
Florida Life Real Estate Group