You found the home of your dreams. You got pre-approved for a mortgage. A closing date is set, and you’re close to getting those keys. You might be thinking about buying new furniture, or maybe you want to settle some old debts before you have a monthly mortgage payment.
Wait! Be careful with your finances. Until you sign that final paperwork at the closing, your loan isn’t guaranteed. Here are 5 things you should avoid doing:
- Don’t change jobs
You’ve already given your lender pay stubs and documentation from your current job. If you take a new job or even if you get a raise, all the paperwork will need to be submitted again. It could also send a message to your lender that you jump jobs a lot and aren’t a good risk.
- Don’t apply for new credit (or go on a spending spree)
Adding another credit card or burning a hole in the ones you’ve already told your lender about can impact whether you get that final mortgage, and don’t forget the importance of debt-to-income ratio and credit scores. A new credit card, even if the balance is zero, means there is the potential for debt.
- Don’t miss loan or credit card payments
Pay your bills and pay them on time. You don’t want anything to impact your credit score.
- Don’t buy a new car (or make other large purchases)
Adding another loan increases your debt. Lenders want to be sure you can pay your monthly mortgage. Adding another monthly loan payment erodes a lender’s confidence that you are a good risk.
- Don’t make large deposits
You may be asking yourself why a lender would care about this. Although a large deposit means you have some money coming in, the problem is that the lender doesn’t know where it came from. If a family member loans you money or you sell something of value to cover closing costs, let your lender know so it doesn’t throw up any red flags.