Congratulations! You applied for your loan and maybe you finally found the house of your dreams. You made a bid, had it accepted by the seller, and went through the mortgage application process. It looks like you'll qualify. The closing is only weeks away, and you are feeling pretty good.
It's smooth sailing from here, right? Probably. However, more than one buyer has had the wind taken out of his sails at this point in a real estate transaction. If at all possible, steer clear of the following "NO-NOs" until AFTER you have gone to settlement.
· Do not take on new debt or apply for new credit cards. The temptation is strong. There are so many big purchases people potentially want to make in connection with a move: appliances, window treatments, furniture, etc.. When you add to this the fact that, today, everyone offers easy terms and no money down - well, why not just do it? Answer: because you will change what the industry calls your "back-end ratios" ( the relationship of your income to your debt). It could also lower your credit score.
· Do not be difficult to reach. The loan officer or processor may need to reach you for additional information or documents. Check your voice mails and emails often. Check your junk email file also. Communication is the key to a smooth closing.
· Do not quit your job, change jobs or take a leave of absence. If at all possible, try not to make a career move during the time between your mortgage application and the closing on the home you are purchasing. But, you ask, "What if it is a BETTER job, for MORE money, in a DIFFERENT field?" Still, try and wait until AFTER closing. One of the factors mortgage companies consider is length of present employment; they are partial to stability. At the very least, changing jobs initiates the need for more paperwork, and maybe a delay in closing.
· Do not stop paying your bills. Pay all your bills on time including rent or mortgages.
· Do not pack too soon. Well, go ahead and pack your clothes and pictures. But, do not pack away your bank statements, tax returns, or other important paperwork. Most especially, do not pack away your checkbook! More than one buyer has had closing delayed while a friend or relative hurried over with additional funds because the checkbook was in the moving van.
· Do not lease a new car. This should go under the general heading of "no new debt". It is highlighted here because, for some strange reason, many buyers do run right out and lease a new car during the intervening time between mortgage application and closing! As with any debt, this will change your "back-end ratios", and may cause you not to qualify for your mortgage.
· Do not throw away pay stubs, bank statements, or other financial documents.
· Do not spend your money needed for closing.
· In short, do nothing that negatively impacts your ability to qualify for your mortgage loan, or initiates a new round of paperwork.
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These suggestions are merely that - suggestions. No one is saying, flat out, that bad things will necessarily follow if you do any of the above. They are offered as cautions. Many buyers seem to view the mortgage application procedure as an static entity, a snap shot of their financial lives at a given moment in time. It is not. It is an on-going process that can take into account everything you do right up until the day of closing.
What NOT To Do After You Apply for a Kentucky Mortgage Loan Approval
