You found the perfect home, put in an offer, and then made a regrettable mistake that caused the deal to fall apart. Avoid this homebuyer’s nightmare by never doing these things after making an offer on a home.
After making an offer on a home and having it accepted, it’s a waiting game until closing. While it might be tempting to go out and buy new things for your home, you need to be aware of the drastic consequences that making any big purchases or life changes can have on your ability to purchase your future home.
Far too often, people underestimate the impact that these choices have and are devastated to hear that their lender is changing how much they can borrow, or if they can borrow at all. It’s a homebuyer’s nightmare, but it’s more common than you might think.
Here are a few things that you should never do after making an offer on a home to reduce the chances of it happening.
1. Go on a spending spree. If you go out and spend a lot of money, it’s going to change your debt-to-income ratio, which means that your lender might not lend you the same amount of money as they initially agreed to lend you. Lenders check your credit and debt-to-income ratio when you apply for a mortgage and right before closing, and if it’s different, it could cause a delay. Save the spending for after you close.
2. Quit or change your job. A change in employment could mean a change in your debt-to-income ratio and your overall income, which could mean a change in the amount that a lender is willing to loan you for a mortgage. Also, changing the type of job that you have (from a traditional salaried job to self-employment, for instance) is risky for lenders and will definitely cause problems.
3. Apply for new credit cards. Whether or not you use them before your closing, even getting a new credit card can result in a botched closing. By applying for new cards, it shows intent to make purchases, which could impact whether you’re able to pay the full amount of your mortgage. Also, every time you apply for a card, the lender does a credit inquiry, which can affect your score. Too many inquiries will cause your credit score to drop, which could make your lender reconsider how much they’re willing to lend you.
4. Stop paying your bills. Missing payments can negatively impact your credit and could potentially ruin your closing, so make sure that you make all of your payments on time. If you miss your current mortgage payment, it could even result in difficulty finding another lender to lend you money at all. It’s definitely not a risk you want to take.
The best way to ensure that your closing goes off without a hitch is to keep things the way that they were when you first applied for your mortgage. No new debt and no big changes should mean no big problems before you get to the closing table. If you have plans to change your job or want to buy new furniture for your home, wait until after closing to do so. Yes, having a mortgage will determine how much other lenders are willing to lend you, but if you have to choose between whether or not you can buy a home or a new couch, you’ll understand why it’s worth it to wait. Tamara Oakly, Coldwell Banker Blue Matter