Top 10 Ways To Tank The Closing On Your New Home
For many of us, it’s a lifelong dream to become a homeowner. It can be a stressful, drawn-out process. You can do a lot of things right, but you can also do a lot of things wrong. Here’s a list of the top ten things NOT to do to make sure you TANK the closing!
- Go ahead and lose your job, or chase your dream of self-employment, or just up and quit for a new job. This is the perfect time, right when the bank is closely examining your income and ability to pay back a major debt.
- Buy your dream car or truck, just because you want it. An additional major debt won’t look bad to your mortgage company / lender at all! Plus, once your closing gets cancelled, you’ll have somewhere to live!
- You’ve worked hard to pay down those credit card balances to make your credit look really appealing on your new mortgage, so go on a spending spree or let your payments fall behind. You deserve all that new stuff!
- Spend the money you’ve set aside for the closing. Chances are, the lender is going to be checking your savings balances again very close to the closing date that’s been set. If there’s chunks of savings missing, it’ll be a red flag for that lender.
- Lie on your loan application. If you leave off any debts or liabilities from your application, the lender will quickly make sure your closing doesn’t happen.
- Buy all of the furniture for your new home. Again, this is a major purchase that will be a red flag to your lender. Leave your savings account alone. Leave your credit cards alone.
- Apply for more credit. Lenders will make sure to keep an eye on your credit report and score while you’re in the closing process. Applying for a loan or a credit card or anything else that will show up on your credit report is a big red flag that will definitely affect your closing. No hard inquiries should show up on your credit report between making the offer and your closing date.
- Make unexplained large deposits into your bank accounts. If you have a large deposit coming, make sure to consult with your loan office. Many times, these can be explained because of bonuses or payments to you or other situations that they’ve seen before, but not looping them in on these large deposits just makes it suspect.
- Change bank accounts, and even banking institutions, with no heads-up to your lender. Sure, we all get sick of our banks now and then, but during the closing process is the worst time to get completely fed up and just switch. Your lender has all of your banking information so they can keep tabs on your accounts and credit. It won’t escape their attention that you’ve switched things up.
- Co-sign a loan for someone else. Co-signing on a loan would be considered not only an inquiry on your credit, but also a liability against your ability to pay back a mortgage under your own name.
If you and your family are getting ready to start house-hunting for your new home, contact the Fairfield Team and we can help you!
If you’re new to the homebuying process, we’d like to recommend you take a look at some of our other blog posts for first-time homebuyers: