What Not to Do Once You Are under Contract?

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What Not to Do Once You Are under Contract?

You know the drill: within the seven day window, after your offer has been accepted on your dream house, you need to take care of many things such as the home inspection, appraisal, collecting all the required documents for the lender, buying homeowners insurance, doing the final walk through and then finally signing the papers.

These are the things that you do know. Without accomplishing these steps in the process, you will not be able to buy the house. However, what about the things that you shouldn’t do once you are under contract?

Let’s have a look at some of the points in the process that are a big NO when you are about to close:

1.  Spending Your Money on Big Items

Just because your offer got accepted does not mean that you should start spending money on new furniture. It’s understandable that you are excited and all you can think about are the things you need to buy to furnish and decorate your house but doing this is a huge mistake. Why? The thing is… when you start spending with a free hand on a credit line, your monthly payment budget that you had calculated goes out of control. This brings us to our next point:

2. Your Credit is Being Monitored by the Bank

Your loan got approved and now you have started using your credit cards. Every purchase you make is being monitored by the bank. Granted, you have cleared all the debts from your credit report but these frequent purchases mess up your debt-to-income ratio. You might not feel a big difference then but once you start making your monthly payments, you will probably fall behind and incur a higher interest rate.

3. Car Leases

Care leases require a credit check and paying money for the down payment that you should be saving for house fees down the line is a bad move. So, until you have closed the deal, stay away from such offers.

4. Switching Jobs

The reason why switching jobs is not a good move, is because the bank often calls your workplace to find out whether you are an employee or not. Now imagine the office informing them that you have left the place. This will put a delay on your loan approval. Moreover, it will be difficult for you to collect all the pay stubs.

These are reasons why you should not make a huge decision that affects your finances. The more stable you look to the bank, the faster they will approve your loan.

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