Before closing on a real estate transaction, there are several things you should avoid to ensure a smooth process and prevent any potential issues. Here’s a list of what you should NOT do before closing:
- Don’t make major purchases: Large purchases such as a car or furniture can affect your credit score and debt-to-income ratio, potentially jeopardizing your loan approval.
- Avoid changing jobs or quitting your current job: Lenders prefer stability in employment history, so changing jobs or becoming unemployed can raise red flags and delay or cancel your loan approval.
- Don’t apply for new credit: Additional credit inquiries can lower your credit score and raise concerns for lenders about your ability to manage debt.
- Avoid co-signing loans for others: Co-signing a loan can increase your debt-to-income ratio and financial liabilities, impacting your eligibility for a mortgage.
- Don’t make large deposits or withdrawals: Unexplained deposits or withdrawals can raise concerns for lenders about the source of funds and may require additional documentation, delaying the closing process.
- Avoid missing payments: Late payments on existing loans or bills can lower your credit score and raise concerns for lenders about your financial responsibility.
- Don’t neglect your financial obligations: Maintain stable finances and continue paying bills on time to demonstrate your creditworthiness to lenders.
- Avoid making changes to your financial situation: Keep your financial situation stable and consistent to avoid potential complications with the loan approval process.
- Don’t ignore communication from your lender or real estate agent: Stay in close contact with your lender and real estate agent to address any issues or concerns that may arise before closing.
- Avoid making any changes to your down payment or closing funds: Keep your down payment and closing funds in the same account and avoid transferring large sums of money between accounts, as this can raise concerns for lenders about the source of funds.
By avoiding these actions before closing, you can help ensure a smooth and successful real estate transaction.