Congratulations! You finally found the
house of your dreams. You made a bid, had it accepted by the seller,
and went through the mortgage application process. It looks like you'll
qualify. The closing is only weeks away, and you're feeling pretty
good.
It's smooth sailing from here, right? Probably. However, more than
one buyer has had the wind knocked out of his sails at some point
in a real estate transaction by the missteps described below. If
at all possible, steer clear of the following "NO-NOs" until
after you have gone to settlement.
Do not take on new debt. The temptation is strong. There are so many
big purchases that people want to make in connection with a move:
appliances, window treatments, furniture, etc. When you add to this
the fact that, today, everyone offers easy terms and no money down-well,
why not just do it? Answer: because you will change what the mortgage
industry calls your "debt-to-income ratio" (the relationship
of your income to your debt).
Do
not change jobs. If at all possible, try not to make a career move
during the time between your mortgage application and the closing
on the home you are purchasing. But, you ask, "What if it's a
better job, for more money, in a different field?" Still, try
and wait until after closing. One of the factors mortgage companies
consider is length of present employment; they are partial to stability.
At the very least, changing jobs initiates the need for more paperwork,
and may delay your closing.
Do not pack too soon. Well, go ahead and pack your clothes and dishes.
But do not pack your bank statements, tax returns, or other important
paperwork. Most especially, do not pack your checkbook! More than
one buyer has had closing delayed while a friend or relative hurried
over with additional funds because the checkbook was in the moving
van.
Do
not lease a new car. This should go under the general heading of "no
new debt." It is highlighted here because, for some strange reason,
many buyers do run right out and lease a new car during the time between
mortgage application and closing! As with any debt, this will change
your "debt-to-income ratio" and may cause you not to qualify
for your mortgage.
In short, do nothing that negatively impacts your ability to qualify
for your mortgage loan, or initiates a new round of paperwork. If
you have any doubts about doing something that may affect your ability
to qualify for your mortgage loan, consult your loan provider before
you do it.
These suggestions are merely that-suggestions.
No one is saying, flat out, that bad things will necessarily follow
if you do any of the above. They are offered as cautions. Many buyers
seem to view the mortgage application
procedure as a static action, a snap shot of their financial lives
at a given moment in time. It's not. It's an on-going process that
takes into account everything you do right up until the day of closing.
