Running Late
Your home purchase agreement may include deadline-specific obligations, such as a home inspection or securing finances for an appraisal. It’s essential that you stay within the established timeframe as closely as possible. Don’t be afraid to follow up with your home inspector, mortgage loan officer and anyone else responsible for meeting the deadlines outlined in your agreement.
“Failing to follow through and comply with that timeline can put a buyer in breach of contract,” says Tony Iacoviello, a real estate agent with RE/MAX Escarpment Realty in Hamilton, Ontario. “It also exposes them to legal liability and damages beyond not being able to buy a home.”
Making Big Purchases During Escrow
Messing with your income-to-debt ratio is a red flag for lenders. The ratio of your monthly income to your debt is one of the main factors a lender considers when qualifying you for a mortgage loan. Before closing on a home, your lender will most likely run your financials two or three more times. You’ll want your finances in tip-top condition during this process.
“Generally speaking, the approval granted by a lender is based on how much debt a buyer can reasonably carry and not be in danger of defaulting,” Iacoviello explains.
Opening New Credit Cards
While it’s tempting to buy new furnishings, dishware and appliances for your future home, be sure to hold off on opening new credit cards until after closing.
“Opening new credit cards increases the amount of money buyers can borrow, making them a greater risk of default in the eyes of a lender,” Iacoviello warns. “This greater risk may cause the lender to reconsider the mortgage loan and possibly even refuse to provide it based on this new circumstance.”
Changing Jobs
It’s good to help the lender feel confident in you before closing. What makes a lender confident? Stability. Changing jobs right before a closing can slow down the process or scare a lender out of the deal. Lenders typically want physical proof of a two-year work history, so this isn’t a wise time to make a big career change.
“Generally, it makes sense to avoid any unnecessary life changes until after you’ve moved in. People who have sporadic or inconsistent work history present a significant risk to a lender,” says Iacoviello.
When you are inches away from sealing the deal on your new home, it’s critical to avoid making these mistakes that can bog down – or stall – or end - the closing process.
Please consider The Myers Team your resource for all things real estate. We have over 32 years of real estate experience, specializing in (but not limited to) the Montgomery County area. If you are refinancing, want a recommendation, need a service provider or just have a home related question, please give me a call at 301-910-9910 or email me at bobmyersteam@gmail.com.
