4 Things NOT To Do Before Closing on Your New Home

By
Mortgage and Lending with Peoples Home Equity, Inc. NMLS-274839 NMLS 274839

Your offer has been accepted, you are excited and looking forward to the next chapter of your life in your new home. While going through the mortgage process, you have no doubt been inundated with disclosures, forms and a gambit of other tasks needed to get the process moving and completed. It is important to bring the new Fannie Mae Loan Quality Initiative to the forefront. As the result, lenders are looking closer at credit and performing checks in the final hour even minutes prior to closing. 

One small oversight could stop the transaction dead in its tracks. To help you, I have put together a list of 4 things that you should NOT DO no matter what, before closing on your new home. This is also important if you are refinancing your current home mortgage.

The First NO NO – Take a Loan out on a Car

Let’s say you purchase a car days before you closing on your new home.  When the lender performs the final check and sees a credit inquiry from the car dealer. They will request a detail of that inquiry on your credit and verify whether or not credit was issued to you for a purchase. The payment will change the qualifying criteria, which may jeopardize and/or change your loan and terms. It is best to wait until the transaction has closed before driving that new car off the lot. 

NO NO Number 2 –  Apply for a New Credit Card

It seems that every store has a credit card and retailers often offer discounts to customers if you carry their card and use it.  Even if the card sits in a box untouched, your credit score and debt to income may be affected by the new card. Again, this may change the qualifications and delay the closing.

 The Third – Max Out Your Credit Cards

Yes, another credit card warning.  It is understandable that you have a new home and will more than likely want to buy furnishings, appliances, or other goodies; however, increasing your monthly debt may change your approval. Also, do not be fooled by the 1-Year same as cash offers, as the minimum payment will be a consideration. 

It is important to point out; your mortgage is based on your debt-to-income ratio and the approval for how much the lender is willing to give you relies heavily on this number.  Just because you have been approved by the lender doesn’t mean the deal cannot fall through at closing. Fannie Mae urges lenders to recalculate the debt-to-income ratio before the closing.  If the lender see this ratio increase, you loan may be denied.

The Fourth NO NO Point – Changing Jobs

Lenders like to see history and documentation and will perform a final verbal verification of employment to assure that the information on the loan application valid. This verification is done just prior to closing. Should you switch jobs, the history and documentation changes. If moving to a new company, it is likely that you will be required to provide proof of 30 days of employment on your new job.

Another important point is the consideration of switching positions within your current company.  If you go from being salaried to an hourly wage or one based on sales and commission, your prior documentation of income may not be usable.  If this happens, you may not qualify for the loan amount you did prior to the recalculation.

I hope this information is helpful. If you have any questions or need assistance, we are here to support you every step of the way. Make it great today, whatever you do...

 

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Proudly Serving the Residential Mortgage needs of the wonderful Veterans & People in Wisconsin. Green Bay, Appleton, Oshkosh, and throughout the greater Fox Cities areas.

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Gwenn Tanvas is a Certified Mortgage Planning Specialists who truly enjoys working with First-Time Home Buyers and Government Programs such as FHA, Federal VA and USDA Rural Housing Loans. Visit her website for more information, on-line calculators and a secure on-line application. She is able to assist with transaction throughout the state of Wisconsin. http://www.WisconsinLoanTips.com or http://www.WisconsinVetLoans.com she can also be reached for comment or to answer questions via email at gwenntanvas@gmail.com

 

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Mary Macy 01/14/2011 11:50 AM
Topic:
Home Buying
Location:
Wisconsin
Tags:
home buyer tips
first time home buyers
changes
underwriting
qualifications

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Show All Comments
Rainer
67,419
Laura Reilly
Real Living Real Estate Professionals - Redding, CA
Home Sales Realtor - Short Sale Team Member - Redd

All important and great reminders, thanks for the post.

January 14, 2011 11:46 AM #1
Rainer
201,577
Mary Macy
Top Agents Atlanta Metro - Roswell, GA
Top Agents Atlanta Metro

Some buyers are not coached in this area and make big mistakes after they have invested time and money, great post, thanks for sharing.

January 14, 2011 11:48 AM #2
Rainmaker
66,960
Gwenn Tanvas
Peoples Home Equity, Inc. NMLS-274839 - Appleton, WI
The Mortgage Gal, 920.267.7891~ SMART - INNOVATIVE

Laura and Mary - I recently had two buyers facing this situation. One purchased appliances and the other a Brand Spankin New Truck - The couple buying the appliances were ok, however the client with the new Truck and $800 monthly payment is learning a valuable lesson. At application I always mention this, however I suppose with all of the information, important details pass them by... Hence my post. I glad you found this information helpful. Make it a great day :)

January 14, 2011 11:59 AM #3
Rainmaker
262,986
Pat & Steve Pribisko
Keller Williams Greater Cleveland West - Westlake, OH

My advice also includes--Don't buy new furniture or appliances for your new home.  If you do, you may have your purchases,but no home to put them in.

January 14, 2011 12:04 PM #4
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Rainmaker
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Gwenn Tanvas

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