It’s so exciting to finally find a new house to purchase. But once you get that offer accepted and apply for the mortgage you’ve been pre-approved for, you need to be aware of a few things so you can close on the house. 

Many homes with financing contingencies don’t close because of problems that could have been avoided from the beginning.

Here are those things to avoid:

Hold off on large purchases

It’s tempting to start buying new furniture and appliances for your home before closing. Even if the appliances you want are on sale now, that purchase could cause your debt/income ratio to change drastically and disqualify you for your mortgage.

Keep your bank account

Switching banks midway through the underwriting process will delay your closing. Lenders will need to track your assets and moving accounts can set back the timeline on your home transaction

Co-signing loans

Co-signing makes you accountable for that person’s loan and causes a higher debt/income ratio because your name is on that account.

Applying for new credit

New credit card accounts and car loans will lower your FICO. Your credit score determines your interest rate, and a higher rate could destroy your chance at the mortgage if it raises your monthly payments too high for you to qualify for the loan.

Consult your loan officer if you need to make any high-cost car repairs before closing. If you can wait until the day after you close on the house for new credit card, car repair, or car loan you’ll be less likely to risk losing the house

Depositing Cash in Accounts

Be sure to account for each cash transaction because cash doesn’t leave a paper trail. Cash can’t be traced like a direct deposit or a deposit by check. If you are making a large cash deposit, consult your loan officer so it can be documented.

Closing credit accounts

Believe it or not, closing credit accounts has a negative impact on your credit score so keep all your old accounts open.

When going through the mortgage process, always consult your loan officer before making any decisions that affect your accounts, whether they are cash or credit. The time between an accepted offer on your dream home and the date of closing is short. Be wise and patient. You’ll be rewarded in the end with a home and then you can start buying things to put in it.

Eileen Saunders, Realtor with Michael Saunders & Company, Sarasota, FL 662-404-0816