With a pre-approval from the lender in hand and an accepted offer on the home of your dreams, you can heave a great sigh of relief. It's all over, and now it's time to plan that big housewarming party. Not so fast. You should understand that there are several bad moves you could end up making before the home is really yours that could destroy your hopes of owning this particular home. Read on for moves not to make before you get handed those keys.
Making a large purchase on your credit card. It's tempting to think that your pre-approval grants you the freedom to spend money on things like new furniture for your new home. The hard truth is that the lender will keep a watch on your spending habits right up to the last minute, so don't use your credit cards for a big purchase, take out any new credit, or ask for a credit increase on any card. Once the mortgage-loan paperwork is signed, you can go ahead and use credit wisely.
Making a large purchase, period. This issue is somewhat connected to credit-card use but involves the amount of money that you are required to have on hand for closing. Referred to as escrow, you must agree to have a certain amount of funds set aside in your bank account to pay for closing-related expenses, which could include a down payment or other closing costs. If you disturb that money for any reason, you may need to delay your closing.
For example, consider this scenario: you are shopping with a friend, and she finds the refrigerator of her dreams. She has the money for it in her checking account, but the store won't accept a check for that purchase. You help her out by charging the appliance on your card that is connected to your bank account, and she writes you a check that you can deposit to cover the cost of the fridge. While this seems innocent enough, this is exactly the type of action that can get your closing put off until you show proof of how the money left and reentered your account.
Changing jobs. Some work-related issues are out of your control, such as a layoff or firing, but make sure that you don't voluntarily quit your job or take an unpaid leave of absence for any reason until after the closing. Mortgage loans are approved on the basis of the employment information that you provide, and any change could cause your loan to be in jeopardy. If you experience any change in job status whatsoever, let your real-estate agent and your lender know right away.
To learn more about these potentially bad moves to make, talk to your real-estate agent.