If you’re reading this article, there’s a huge possibility that you’re already closing on a house. If you’ve followed some home buying tips and did your research, then you’ve got nothing to worry about.
However, just because you’re closing on a house does not mean you’re safe. You can still make mistakes during the closing. Because of this, it’s best to know what these mistakes are to avoid doing them.
Most of these mistakes can lead to delays. However, some of them can result in cancellation. Whether or not you’re buying a house using a Hawaii BAH, here are several mistakes to avoid during closing:
Be Cautious of Fraud
You should be wary if you get a call, text message, or email asking for a change in how you make your payment at closing. Make sure you contact your lender to speak with someone you can rely on.
Ignore the message and contact someone you can trust. It is good to discuss with your lender the possibility of fraud early in the process. This will help you figure out the best thing to do if you suspect something fishy.
Be Ready for Closing Day
To understand what to expect during the closing day, you should talk to your lender. You will have to sign a lot of paper during this period. Thus, you should know if you will have the opportunity to preview them before signing.
Also, you are going to make your down payment and other pre-paid expenses at the closing table. Talk with the lender about these payments. Oftentimes, they will need a cashier’s check or wire transfer.
Record Your Deposits
Mortgage underwriters will probably want paperwork to back up any huge deposits into your accounts during this period and possibly several months before. Did you earn money from your garage sale? It is perhaps wise to utilize it for groceries and other expenses instead of depositing it.
Did you sell your old items to raise money for a down payment? You should be ready to show the documentation of the transfer of ownership and the bill of sale.
Avoid New Credit
If you are planning to open a new credit for your home, you should consider it again. You will lower your credit score if you access new credit. Your mortgage lender will likely run your credit again before closing. A lower score can influence the amount of interest you pay. Oftentimes, you might not be qualified for the loan anymore.
Aside from that, new debt can change your debt-to-income ratio as well. If the percentage of the debt you pay surpasses the standard for the loan program, you will not qualify anymore for the loan.
Postpone Major Purchases
You might be tempted to buy the furniture pieces that you want for your new house. However, you should wait. Your preapproval for the mortgage might have been based on the amount of money you’ve got on hand. Cash reserves might be repaired for costs before closing. Because of this, you should postpone major purchases before closing on the house.
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