Homebuyers: Follow these 10 real estate commandments to ensure you make it all the way to the closing table.
If you’re a homebuyer and you want to be sure to make it to closing, follow these 10 real estate commandments:
Thou shall not:
1. Change jobs or become self-employed. If you change your industry or how you’re compensated, it can really shake up how the mortgage approval process goes for you.
2. Buy a new vehicle. Even if your car is totaled, it’s very important that you wait until after closing to replace it; anything that affects your credit can really affect your ability to get approved.
3. Buy new furniture. Wait until after you’ve closed, no matter how exciting, because, again, changes to your bank statements/credit can negatively affect your ability to get a loan.
4. Fall behind on credit card payments. It can be tempting to skip a payment one month and just catch up next month, but this can have a massive effect on your credit score. Lenders do credit checks prior to closing even if you already had one.
5. Omit financial debts or liabilities from your loan application. If you forget to inform your lender of liabilities that don’t come up until later in the underwriting process—like deferred loans or loans you’ve co-signed—those can catch up with you later.
6. Stop paying current mortgage or rent. Most lenders follow the guideline that if you’re more than 15 days past due with your mortgage payment, you then have to go a full 12 months of making on-time payments in order to qualify.
7. Allow additional credit inquiries.
8. Co-sign on a loan. Even if it’s for your kids, wait until after you’ve closed.
9. Make large deposits into your bank account. If your lender finds deposits that can’t be accounted for, that’s a red flag. Those funds need to be seasoned in your account so that it’s not considered a potential liability.
10. Change banks/accounts or do excessive transfers. Lenders want to understand where your money is coming from so they have a real sense of your ability to pay and what kinds of obligations you have.
If you follow these 10 real estate commandments, it will make the process of getting all the way to the closing table much easier.
If you have any questions about buying or selling a home, reach out to us. I’m always here to help.