You found the home of your dreams and your offer was accepted. Don’t celebrate just yet; there are still four major missteps that could lead to a delayed or even canceled closing. Mortgage lenders review your income and credit when applying for the loan and again on closing day. Here are four things avoid doing before you close on your home:
Applying for credit or making big purchases – It can be tempting to order new furniture or art when you are in the process of closing your home. Big purchases like these may delay your closing. This changes the information that your mortgage loan officer has on file. Doing so could change your credit score, your rate and any additional fees associated with your closing.
Consolidating or applying for new loans – Your ability to purchase a home relies heavily on your debt to income ratio. When you open a new loan or line of credit the lender has to recalculate your debt to income ratio. This ratio can impact your rate and may even lead to a canceled closing.
Open a Dispute on Your Credit Report – It is important to wait until after the mortgage has closed to open any dispute on your credit report. While the dispute is being process, it will not impact your credit score but this raises a red flag to lenders that may prevent the mortgage from being approved.
Changing Jobs – Making a career move is one of the biggest ways to postpone your closing. On closing day, lenders not only verify your credit but also your income. Your income helps decide the specific loan that you qualify for and a change will make your lender reevaluate everything.
Being approved for a mortgage does not guarantee a closing. Avoiding these things can make your home buying process less stressful. The home buying process can be complicated and confusing; the Michigan First Mortgage team will walk you through every step.