Things NOT to Do Before Closing on a Home

Things NOT to Do Before Closing on a Home

Congratulations! You’re almost at the finish line of buying your home. But before you get too excited, there are a few critical things you need to avoid doing before closing that could put your purchase in jeopardy.

1. Don’t Open New Lines of Credit
   Thinking of opening a store card or financing furniture? Wait! Lenders check your credit right before closing. Opening new accounts can impact your score or debt-to-income ratio, which could cause your loan to be denied at the last minute.
2. Don’t Make Large Cash Deposits
   Large, unexplained cash deposits can raise red flags for lenders. They need to know where your money comes from to ensure you’re not using unverified sources. Always consult your lender before making big financial moves.
3. Don’t Close a Credit Card
   It may seem like a good idea to close a credit card you no longer use, but this could harm your credit score. Closing an account changes your credit utilization ratio, which could negatively affect your approval.
4. Don’t Buy a Car or Big-Ticket Items
   A shiny new car might be tempting, but buying it before your home closes can impact your debt-to-income ratio and credit. Lenders could reconsider or deny your mortgage based on the new debt.
5. Don’t Change Jobs
   Job stability is crucial for mortgage approval. Switching jobs or changing your income stream can delay the closing process or even cause a denial. Wait until the deal is done before making major employment changes.
6. Don’t Increase Credit Limits or Run Up Debt
   Even if your lender has approved your mortgage, they’ll check your financial status again before closing. Increasing your credit limits or running up new debt can cause a shift in your financial situation, possibly jeopardizing your approval.

Bottom line: Wait until after the closing to make any significant financial or life changes. Keeping your finances stable ensures that your closing goes smoothly and you’ll be able to move into your new home without any last-minute surprises.

If you’re thinking of buying or selling a home, I’m here to guide you every step of the way. Let’s make sure your closing goes off without a hitch!

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