What To Avoid Prior To Closing
There are 3 major things you should avoid prior to closing on your mortgage loan for your new home. You are so close to closing on your new home and getting the keys you can see the finish line! However, the mortgage process is long and complex and until you sign the papers nothing is done deal. You will want to avoid doing these 3 major things to help ensure you reach the finish line and get the keys to your new home!
1. Opening a new line of credit or loan.
You've been pre approved for a mortgage, the lender took a look at your finances and determined at the time you submitted your application you were eligible to borrow money. Prior to closing, your loan will go through underwriting where they will recheck your finances in more detail. If you open a new line of credit or get a new loan this will affect your debt to income ratio and can temporarily dip your credit score. Both of these things can cause your lender to no longer approve your mortgage for funding.
2. Making a large purchase on your credit card.
Same as opening a new line of credit; making a large purchase on your credit card can both increase your debt to income ratio and dip your credit score.
3. Quitting or changing your job.
You will want to avoid quitting or changing your job that you used for income on your mortgage application. During the underwriting process, your lender will verify your employment with your employer to ensure you are able to make the monthly mortgage payment. While it's possible changing your job won't cause the loan to not fund, it can slow down the process. It is best to wait until you have signed the closing paperwork and have keys in hand to make any employment changes.
Check out this DTI calculator to see where you stand.