Congratulations! You finally found the house of your dreams. You
made a bid, had it accepted by the seller, and went through the
mortgage application process. It looks like you'll qualify. The
closing is only weeks away, and you're feeling pretty good., more
than one buyer has had the wind knocked out of his sails at some
point in a real estate transaction by the missteps described below.
If at all possible, steer clear of the following "NO-NOs" until
AFTER you have gone to closing.
- Do not take on new debt. The temptation is
strong. There are so many big purchases that people want to
make in connection with a move: appliances, window treatments,
furniture, etc. When you add to this
the fact that, today, everyone offers easy terms and no money
down--well, why not just do it?
Answer: because you will change what the mortgage industry calls
your "debt-to-income ratios"
(the relationship of your income to your debt)
- Do not change jobs. If at all possible, try
not to make a career move during the time between your
mortgage application and the closing on the home you are purchasing.
But, you ask, "What if it's a BETTER
job, for MORE money, in a DIFFERENT field?" Still, try and wait
until AFTER closing. One of the factors
mortgage companies consider is length of present employment;
they are partial to stability. At the very
least, changing jobs initiates the need for more paperwork,
and may delay your closing.
- Do not pack too soon. Well, go ahead and pack
your clothes and dishes. But, do not pack your
bank statements, tax returns, or other important paperwork.
Most especially, do not pack your checkbook!
More than one buyer has had closing delayed while a friend or
relative hurried over with additional funds
because the checkbook was in the moving van.
- Do not buy or lease a new car. This should
go under the general heading of "no new debt." It is highlighted
here because, for some strange reason, many buyers do run right
out and buy or lease a new car during the
time between mortgage application and closing! As with any debt,
this will change your "debt-to-income ratios"
and may cause you not to qualify for your mortgage.
In short, do nothing that negatively impacts your ability to
qualify for your mortgage loan, or initiates a new round of paperwork.
If you have any doubts about doing something that may affect your
ability to qualify for your mortgage loan, please consult your loan
provider before you do it.
These suggestions are merely that--suggestions. No one is saying,
flat out, that things will necessarily follow if you do any of the
above. They are offered as cautions. Many buyers seem to view the
mortgage application procedure as a static action, a snap shot of
their financial lives at a given moment in time. It's not. It's
an on-going process that takes into account everything you do right
up until the day of closing.
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