When purchasing a home, whether you are a first time home buyer or not, the excitement of closing on your home loan is inevitable. Often, there is so much time between applying for the mortgage and the closing that buyers tend to get anxious and begin to think about things that they will need. People often think that once they are approved for a mortgage, the path is cleared and that they can do anything they want. Be warned that there are several things you definitely should not do when you are ready to close on a home loan. Here are a few things that can surely ruin your home loan closing:
-Do not use your credit cards while waiting to close on your home loan. Many people feel the urge to purchase new furnishings when getting ready to move into their new home. This is one of the worse things you can do. Using your credit cards will increase your debt to income ratio and can result in your home loan being rejected.
-Do not apply for another loan such as a car loan or additional credit cards. Any additional loans will change your debt to income ratio. Any additional credit cards can make your available credit too high. Both of these scenarios can cause your home loan to be rejected.
-Do not change jobs during this time of waiting. In fact, do not change jobs until after the closing has taken place and the papers have been signed, sealed and delivered. This can cancel out your original loan application and your approval.
Buyers must know that a lender can and often does run another credit report right before closing. If anything has changed such as new loans, additional credit cards, increased payments, late payments and a variety of other scenarios, the whole home loan can be canceled. A change in the debt to income ratio can cause a loan to be rejected. New late payments on the credit report can also cause the home loan to be rejected just as you are ready to move in to your new home.
Changing jobs right before closing is also a big problem. It changes the whole loan application and can change to outcome of the approval. Buyers often think that once an employment verification has been done, they are free to move on. This is not the case and never has been. After a loan has closed, the quality control department of the lender randomly picks loans to re-verify the information to make sure it was all accurate and true on the day of closing. If you did not work at the place of employment stated on the loan application on the day of closing, you will encounter problems and the loan can be recalled.
It is wise for buyers to be aware of what the consequences are of changing any information that they have submitted on a home loan application in order to prevent last minute loan cancellations.