Six Things NOT to do Before Closing on Your New Home


Close your loan on time with these tips from our preferred lender, RMC Home Mortgage

Getting pre-qualified with a mortgage lender for a new home can be very exciting. However, keep in mind that everything you do from now until your final loan approval at closing is detrimental. Significant changes just before or after you qualify can trigger red flags to lenders about the stability of your loan.

Here are our top six DON’TS to help you stay on top of the home loan process and out of hidden traps that could upset the course of your closing.

Don’t Change Jobs

Mortgage companies favor consistency and stability. They correlate strong job histories with stable income, letting them know you’re responsible to make loan payments on time. Switching jobs will also require further verification for the mortgage companies, resulting in closing delays or a lower final loan approval rate.

Don’t Close Credit Cards

Believe it or not, closing credit cards have the opposite effect on credit than you may be aware of. You can tighten up your records by continually making payments on time, but make sure to keep your lines open – even if you don’t owe anything.

Don’t Open New Lines of Credit

Not only can new credit inquiries lower your credit, but they can also be a signal to your mortgage lender that you’re a higher risk. Mortgage lenders are required to update your credit report a few days before closing, and any new inquiries will require verification of new accounts. This can cause closing delays or a lower final loan approval rate.

Don’t Make Big Purchases on Credit

We understand that a new home can be very exciting, but be cautious spending on credit after getting pre-approved. Wait until after closing to purchase new furniture, appliances, or other large assets such as a car. Making large purchases using existing credit accounts can negatively affect your debt to income ratio, which then in turn negatively affects your risk credibility with mortgage lenders.

Don’t Switch Banks

As mentioned before, mortgage companies favor consistency and stability. When you are trying to qualify for a home loan, having a stable banking history is a positive sign. Avoid switching banks or depositing large quantities into your bank account, as it can trigger a red flag to your mortgage lender.

Don’t Co-Sign on a Loan

Even though you’re not responsible for making payments as a co-signer, it will still show up as debt on your reports. This can increase your debt to income ratio.

RMC Home Mortgage encourages a successful home buying experience for every customer and will help guide you through the loan process all the way to homeownership.

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