Your offer has been accepted. You’re moving forward with the inspection and seller’s repairs. The lender has hired an appraiser. Escrow is working toward the closing date. We are now only days away from the BIG day, and then…
You see that living room set on sale at Mor Furniture and you put the full $3,500 on your credit card. Great planning for the move-in, right? Wrong!
This is your friendly, public-service announcement: Heading into the final stages of the home purchase, you should do nothing to upset your credit report, because it is monitored like a hawk by your lender.
Your mortgage pre-approval was granted to you based on the amount of money you had at the time of the pre-authorization – or even when your approval was fully underwritten. Just when you thought your mortgage was clear to go forward, the lender pulls your credit one final time just before closing.
Stating the obvious, it is important – not just practical – that you spend as little money between now and your closing date. And, if possible, pay all of your monthly bills on time.
Browsing Expedia for that vacation you’re planning for six months from now? Browse all you want – but don’t purchase airfare, make a deposit on a hotel room or even get a reservation for a rental car. Nope. Nope. Nope.
Mor and other furniture stores offer a line of credit to potential customers – but don’t take the bait. The store’s bank offers credit to people assuming they will make a monthly payment from the start, which will likely throw off the debt-to-income ratio. Even when you are deferring payment for a year, the debt will typically hit your credit report today.
Even changing jobs – especially when your paycheck amount significantly changes – can cause credit agencies to signal a red flag.
One mistake could easily ding your financial standing and lead to a lower loan amount or – gasp! – have the loan denied.
If in doubt, please contact your mortgage lender before making a huge mistake.