You’ve finally found the home of your dreams! You’ve signed the documents, and you’re looking forward to the deal completing and taking ownership of your new home soon!
But what’s this? The bank called, your financing was compromised unexpectedly! Next thing you know you’re in a heated phone call with your mortgage broker and your real estate agent about what might have happened that would sabotage your mortgage.
Before things get to that point, let’s go over 3 things you, as a buyer, should avoid before your completion.
Changes to Your Credit & Bank Accounts
Your mortgage is typically approved on the basis of your debt to income ratio. When you make any changes to your credit, no matter your intentions, it could be a bad sign to banks and lenders. For example; Opening a new line of credit or increasing your credit limit could indicate a need for additional financial support. Closing a bank account might be construed as shuffling funds or hidden debt.
Changing Your Job
Whether you were fired or you’re upgrading to a better pay. Changing jobs and work status typically means it affects the predictability of your income. Particularly so if you are self employed. Banks and lending institutions look at your job history and your income history before they grant your loan. That isn’t to say that changing your occupation will definitely affect your loan, but in most cases you will want to be careful and consult your mortgage broker before you make any decisions.
Large Cash Transactions
Now that you’re expecting a new home, you might be tempted to splurge just a little bit more. Such as a car, boats, furniture or appliances. But keep in mind that pre-approvals are granted based on the level of debt and financial situations you have at the time. They expect those financials to look the same at the time of the completion.
If you’re spending large cash transactions of anything upwards of $10,000 it can lower your score, and impact the interest rate and loan.
Lenders, banks, and brokers will all look at your financial stability before granting you your loan. Even if you are pre-approved, any of these changes could affect your financial security and thus your loan.
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