Before you close on a mortgage deal, it is critical that you don’t take any steps with your finances that can derail the closing process. Making significant changes to your credit and changing your job situation, for example, can severely change your financial profile as a borrower and can delay the closing as a result. This also applies to the borrowers who are refinancing their mortgage.
There are some major mistakes that you absolutely need to avoid when you are closing on a mortgage. The key thing to remember here is any considerable changes to your overall financial situation, like taking out another debt, significantly consuming your credit, or quitting or changing you job can delay or even cancel your mortgage loan finalizing. Here are some common mistakes that you should look out for
Your credit score plays the most important role in your mortgage application. So, it is important that you keep tabs on it at all times during the processing of your loan. Know that, it’s not only the big purchases that can alter your credit score. In fact, opening a new credit card or closing an existing one, or taking out a personal loan can also impact your credit.
If you are about to close on a house, it’s probably not the best time to purchase a new car, boat, or other expensive appliances. Basically, anything that you might need to pay in installments is best to delay until after your mortgage is finalized.
Closing on a mortgage is time sensitive. Even if you locked your mortgage rate, that only guarantees thing for a limited period. It’s important to keep up with schedule and make sure that all your paperwork is complete and submitted on time. Otherwise, you will be Not risking the rate and terms you agreed to and could have to start the process all over again.
In the current competitive Real Estate market, a pre-approval letter for the mortgage loan has become critical. You need to make sure that if and when you find your dream home, you are ready to make an offer. A pre-approval letter gives you a competitive edge over other potential buyers and your seller will consider your offer more seriously as compared to the buyers who do not have a pre-approval letter.
Another major mistake to avoid is changing or quitting your job right before closing on the mortgage. A lender needs to ensure that you have a stable source of income and that you can afford to repay the mortgage. If you got pre-approved for a mortgage based on a certain job or income, any chances in the interim before closing can be a red flag and delay your closing.