As a Realtor, when I work with buyers who have just had their offer on a house accepted, I often give them the following list of things they cannot do until after the closing. I call them the 10 Commandments of Buying a Home.
1. Thou shalt not change jobs, become self-employed or quit your job.
2. Thou shalt not buy a car, truck or van (or you may end up living in it).
3. Thou shalt not use credit cards extensively or miss payments on current accounts. 4. Thou shalt not spend money you’ve set aside for closing costs.
5. Thou shalt not omit debts or other liabilities from your mortgage application.
6. Thou shalt not buy furniture.
7. Thou shalt not originate any inquiries into your credit (this can lower your credit score).
8. Thou shalt not make large deposits without checking with your loan officer.
9. Thou shalt not change bank accounts.
10. Thou shalt not co-sign a loan for anyone.
The reasons for these “shalt nots?” When a home-buyer applies for a mortgage, the lender checks their credit score (which is part of what determines the interest rate of the loan); the balance in their bank accounts, the pay stubs from their job(s), and recent tax returns. In the 30-45 days between a mortgage pre-approval and the closing on the home, the lender goes through this entire process again before final mortgage approval. If the buyer has broken some of these rules, it may affect the lender’s ability to move forward with the loan. And the buyer may be left high and dry, unable to go through with the home purchase.
Better safe than sorry, n’est ce pas? Happy house hunting.