Avoid These Mistakes Before Closing on Your House!

Closing on a house can be both exciting and nerve-wracking at the same time. As the date of closing approaches, it’s important to make sure everything goes as smoothly as possible. Here are some things you should avoid doing in the week leading up to the closing date:

Opening a new line of credit: Avoid opening any new credit accounts before closing on your house. This could potentially lower your credit score and raise red flags with your lender.

Making a large purchase on your credit card: It’s best to hold off on any big-ticket items until after the closing. This could also affect your credit score and debt-to-income ratio, which could potentially jeopardize the loan approval process.

Quitting or changing your job: A stable income and employment history are crucial when applying for a mortgage. If you are thinking about making a career change, it’s best to wait until after the closing.

Ignoring your closing schedule: Don’t assume that everything will fall into place on its own. Stay on top of your closing schedule and responsibilities to ensure everything is completed on time.

Forgetting to pay bills: Keep up with your regular bill payments, including utilities, credit cards, and other debts. Late payments or outstanding debts could affect your credit and loan approval process.

By avoiding these common mistakes, you can help ensure a successful and stress-free closing on your new home. When you’re in the process of purchasing a home, closing day can seem like a finish line that’s just out of reach. However, the week leading up to closing is critical in ensuring a smooth and successful transaction. There are several things you should avoid doing during this period that could have a negative impact on your finances and your ability to close on your new home. Here are some things not to do in the week before closing on a house.

Avoiding New Credit Lines

Opening a new line of credit or taking out a loan may seem like a good idea if you need funds for furniture or other items for your new home. However, it’s important to avoid opening any new accounts during the week before closing on your house. New lines of credit can impact your credit score and create additional debt, which could cause issues with the underwriting process. When you apply for new credit, your credit report will be pulled, and lenders will see that inquiry, which can lower your score. Additionally, once approved, your credit utilization rate will change, which may also impact your credit score.

Limiting Your Credit Card Usage

In addition to avoiding new lines of credit, it’s important to limit your credit card usage in the week before closing on your house. Making large purchases on your credit card can impact your debt-to-income ratio. Your debt-to-income ratio is an essential factor that lenders use to determine your ability to repay your mortgage. Your credit card balances impact your credit score, so if you’re near your credit card’s limit, it can decrease your score and impact your mortgage rate. Therefore, you should focus on paying down your credit cards and avoiding making any large purchases that will increase your balance.

Keeping Your Current Job

It’s important to keep your current job during the home buying process. If you quit your job or change jobs during the week before closing, it could impact your approval for a mortgage. Lenders like to see stability, and any changes to your employment can raise red flags for underwriters. It’s essential to keep your current job and avoid any financial changes like switching to self-employment, even if it seems like an opportunity for a better-paying job.

Sticking to Your Closing Schedule

Ignoring your closing schedule is also one mistake to avoid in the week before closing. The closing process is a complex one, and it’s essential to stick to your closing schedule to ensure a timely and successful close. If you’re running late on any tasks that need to be completed before your closing, it can cause delays, which could ultimately lead to a canceled closing. Therefore, it’s essential to pay attention to your closing schedule and ensure that all tasks are completed on time.

Ensuring Timely Payment of Bills

Forgetting to pay bills is another mistake that could have a negative impact on the home-buying process. Late payments on any bills, including credit cards, utilities, and other loans, can negatively impact your credit score. Additionally, late payments could result in a lender retracting the loan, thus causing the home purchase to fall through. To ensure that you’re not causing any unneeded complications, you must keep an eye on any bills that need to be paid and pay them on time.

Refraining from Big Purchases

Making any large purchases before closing, including a car or furniture for your new home, is not recommended. Making a big purchase can have a significant impact on your debt-to-income ratio and will reduce the amount of money you have available for closing costs. Additionally, making a significant purchase and taking on extra debt can impact your credit score, which will impact the interest rate you qualify for on your mortgage. Therefore, it’s essential to avoid making any significant purchases until after the closing process is complete.

Avoiding any Financial Changes

Finally, it’s essential to avoid any financial changes in the week before closing on your house. Avoid opening any new bank accounts or shifting money around between accounts. Making any sudden changes to your finances can raise red flags for underwriters, which could put a stop to the closing process.

Preparing a Checklist to Keep Track of Important Tasks

To ensure that you avoid any mistakes that could cause complications in the home buying process, it’s helpful to make a checklist of essential tasks that need to be completed before closing. This checklist should include everything from your closing schedule to bill payments and should be updated frequently to ensure that all tasks are completed on time. By staying organized and paying attention to the details, you can ensure a smooth and successful closing process for your new home. In conclusion, the week leading up to closing on a house is a critical period in which certain actions should be avoided. By following these tips and avoiding any financial changes, large purchases, and new lines of credit, you’ll increase your chances of a successful and timely closing. It’s important to keep the progress of your home-buying process in mind, ensuring that you’re not making any moves that could negatively impact your credit score or the underwriting process. Remember to stay organized and prepare a checklist to keep track of important tasks, and you’ll close on your new home like a pro.