Buying a new home is an exciting moment. After finally finding your home and entering into a contract, it\u2019s time to go through closing. This is a critical period of the buying process. Any changes to your credit or job situation can delay closing. <\/p>\n\n\n\n
Avoid compromising your mortgage approval by making these\ncredit mistakes before closing. <\/p>\n\n\n\n
Don\u2019t wait until you start applying for mortgages to review your credit report. The sooner you address any problematic credit issues \u2013 like a history of late payments, significant debt, or debt collection, the better since mortgage lenders may either offer you a less than ideal interest rate or deny your application altogether.<\/p>\n\n\n\n
To avoid this, request a free credit report (you\u2019re entitled\nto a free report from each of the three credit reporting agencies each year)\nand review the report for errors and dispute inaccurate information. You cannot\nremove negative actions, like late payments or delinquent accounts. Those will\nstay on your report for seven to ten years. You can still boost your credit\nscore by paying your bills on time, not maxing out your current credit cards,\nand paying more than the minimum on your debts.<\/p>\n\n\n\n
Payment history is a big factor in determining your credit\nscore. It accounts for 35% of your score calculation. It shows your ability to\nmanage your debts and is the strongest predictor of the likelihood that you\u2019ll\ncontinue to meet your debt obligations. Falling behind on your debt payments\ncan decrease your credit score and could indicate that you can\u2019t keep up with\nyour bills. Setting up automatic payments each month will help you avoid\nmissing payments. <\/p>\n\n\n\n
Some buyers are surprised to know they can still be denied a\nmortgage during closing after being pre-approved. That\u2019s because mortgage lends\ndo a final review of your credit during the closing process. If your credit\nreport has drastically changed since you\u2019ve been pre-approved, lenders may\neither increase the interest rate provided or, in dire cases, deny your loan\naltogether.<\/p>\n\n\n\n
It\u2019s best to maintain the status quo and avoid doing\nanything that could affect your credit history. Some things to avoid include\nopening new lines of credit or closing older accounts. These actions can lower\nyour credit score during a critical time. So, play it safe and hold off on new\npurchases until after you\u2019ve closed on your new home.<\/p>\n\n\n\n
Running up your current accounts with new purchases can also\npotentially doom your mortgage. Adding more debt will increase your credit\nutilization, which can negatively impact your credit score. Lenders want to\nmake sure you\u2019re not carrying more debt than your income can handle. Either use\ncash or wait to make any new large purchases until after you\u2019ve closed,\nespecially if you\u2019ll be putting them on credit.<\/p>\n\n\n\n
Avoid making large deposits or withdrawals while going through closing. Unsourced money moving through your accounts can raise red flags for lenders. This may look like you received another loan which can affect your debt-to-income ratio.<\/p>\n\n\n\n
Don\u2019t worry if you\u2019ve received a bonus from work or tax refund; those can be easily verified. You can expect to provide proof to verify any unsourced money received, like a large monetary gift from a family member or business income in your personal income, is not a loan. This proof can range from a bill of sale, canceled check, or a paystub. <\/p>\n\n\n\n
Changing jobs may be a good thing for your career but it could complicate your mortgage. Mortgage lenders look at your employment history to make sure you\u2019ve maintained steady employment and income since that usually signals your ability to pay your mortgage. If you change jobs while going through the home buying process, lenders are not able to get a good idea of your stability, which makes them nervous. If possible, hold off on making any job changes until after you close.<\/p>\n\n\n\n
Don\u2019t sabotage your mortgage by making one of these\nmistakes. If you\u2019ve planned on buying a new home this year, taking care of your\ncredit will make sure you\u2019re in the best position to secure financing. It\u2019s a\ncritical step to make sure your closing process stays on track. <\/p>\n\n\n\n
Ready to make the leap into homeownership? SummerHill is renowned for developing specialized single-family detached and multi-family housing communities in established residential settings throughout the San Francisco Bay Area. Visit us at SummerHillHomes.com<\/a> to learn more about our new home communities<\/a>, get pre-approved by our preferred lenders<\/a>, and schedule a private tour today.<\/p>\n","protected":false},"excerpt":{"rendered":" Buying a new home is an exciting moment. After finally finding your home and entering into a contract, it\u2019s time to go through closing. This is a critical period of the buying process. Any changes to your credit or job situation can delay closing. Avoid compromising your mortgage approval by making these credit mistakes before […]<\/p>\n","protected":false},"author":1,"featured_media":5316,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[453],"tags":[485,402,385],"yoast_head":"\n