The sale is almost final and you are anxious to move and settle into your new home. You are feeling confident and excited about embarking on the home ownership journey.
Time to celebrate! But celebrate wisely.
Maintaining financial stability from the time of signing the purchase contract to home ownership is essential for a successful closing process.
Here are 3 financial pitfalls to avoid before closing on your new home:
- Changing Jobs: Your lender needs confidence in your ability to afford the house. A consistent and steady job history builds that confidence. Take the new job offer and lenders will reassess your financial situation.
- Making Large Purchases: It’s tempting to start buying for your new home. But any large purchases on a credit card adds more debt to your monthly income. Lenders use “debt-to-income” ratio, or DTI, when evaluating a loan application. Adding debt will negatively impact your ability to secure a loan. Paying in cash isn’t an option either. Cash reserves are also used by lenders when approving a mortgage.
- Disrupting Your Credit Status: Opening or closing credit card accounts can negatively impact your credit status. Some lenders will re-pull a credit report in the last week of closing. Late payments will also affect credit status. Paying bills late won’t just cost you money, it can cost your loan approval.
Avoid these 3 financial pitfalls and be sure to:
- Keep your current job and table the offer until the sale is final.
- Keep credit card balances low with minimal new debt.
- Keep the accounts you have and don’t apply for new cards.
- Keep current on ALL bills.
Once the keys are in your hands and the sale is finalized, it’s time to celebrate.
Here’s to your new home!
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