TNG

TNG Explains: Things to Avoid Before Closing on a House

Securing a home purchase isn't guaranteed until obtaining the keys.

Nov 29, 2023

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It’s important to know that the purchase of a home is not 100% secured until you have the keys to your new property. In the time between your offer of purchase being accepted and finally moving in, a lot can happen! 

One of the most important things to be aware of is that being approved for a mortgage loan is not the same as the deal being “closed”. Your mortgage approval is determined by your financial status at the time you applied for the mortgage, so any significant purchases or change to your credit score could affect your lender finalizing your loan. 

To help avoid any major problems, here are some things to consider avoiding before your loan is finalized: 

Avoid buying too much furniture. 

It can be exciting to start furnishing your new home but doing so can also affect your finances and credit score. Try to only buy the absolute essentials before moving into your new home and purchase the rest later. 

Avoid purchasing a new vehicle. 

Just like buying new furniture, a new vehicle purchase can be tempting once you’ve been pre-approved, and it seems like your new home is secured. But remember, expensive purchases put your closing in danger. If you can wait until after you’ve moved in, you’ll be much better off. 

Avoid starting a new job. 

If you start a new job during the closing period, it could be seen as a red flag for the lender. Your history of job stability and employment length at your current job are factors that are closely reviewed when applying for a mortgage. Wait until the property closes and you have moved in before choosing to switch jobs. 

Avoid applying for new credit cards or increasing credit limits. 

Adding in any new streams of credit could be a red flag to your lender. To keep your closing schedule on track, keep all credit cards unchanged without altering your credit limits.  

Avoid late payments. 

Be sure to stay on top of your bills. Anything that affects your credit score, such as paying bills late, can cause you to lose your financing. 

Avoid co-signing on any loans. 

Do not co-sign on any loan before moving into your new house. Becoming responsible for a new loan could be a red flag for the lender and may lead them to reconsider your approval. 


Keeping your big purchases and career changes until after you close and move into your home will help make the closing process run smoothly and help minimize roadblocks.  

 

This article is for informational purposes only and is not financial or legal advice nor a substitute for legal counsel. 

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