When buying a home, there are several things you should and not to do before closing a real estate transaction. Your real estate agent and mortgage broker are excellent sources of advice and information about different things you should and should not do when buying a property. This article will tackle the things to avoid before closing on a home.
Do not close any account
Closing an account will look like you have less available credit. It is better to pay down accounts to 30% or pay it off if you insist, but do not close them.
Do not start a new job
Job history may not be the most important thing to get approval. However, job history and the length of stay to your present employer are crucial to getting mortgage loan approval. If you have stayed in your current job for over two years, you must wait for the mortgage loan to be closed and moved to your new home before switching to another company.
Do not pay bills late
Lots of people have dropped credit scores while house hunting because of making late payments. Some people even barely got pre-approved have their FICO scores drop, search for a property, make an offer but no longer qualify for the mortgage because of late bill payments.
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Do not buy a new car
Although it is tempting to buy a new car after getting pre-approved in a mortgage loan, you should not do it before closing on a house. Most people get excited after knowing that a mortgage lender offers them a chance to purchase a property. Most of them think that after getting pre-approved, their income and credit are good enough to buy a property. Thus, it is also good enough to buy a new vehicle.
Take note that lenders issue a pre-approval based on the current level of income and debt of the person applying for the loan. If you get a new car loan, it will change everything. The best thing to do is to wait until you close the loan before getting a new vehicle.
Do not establish a new line of credit
If you received cash-back card offers out of the blue, shred the reply forms, delete those emails, or wait until the transaction has closed before accepting a new credit.
Do not increase the credit limit of your cards
If you receive any offer in the mail about an increase in your card's credit limit, do not respond to it. Keep in mind that anything you want to buy with your credit card can wait.
After receiving your pre-approved mortgage, you should keep your life exactly as it was. This means you should still pay your bills online, do not close any accounts, or add new debt. All the suggestions mentioned above will keep you ready and prepared for the closing.