You’ve found your new home. It’s perfect: the house, the yard, the neighborhood, the school district. You’ve been pre-approved, your offer has been accepted, and the inspection went smoothly. All that’s left is the closing. Buying a home is a major transaction and a successful deal depends on many things.
Make sure you’re prepared and follow these four tips for a successful mortgage closing.
Maintain (or improve!) your credit rating.
Fannie Mae’s Loan Quality Initiative will prompt your lender to check your credit again just before closing, so it’s extremely important to maintain your credit rating throughout the entire mortgage process. Something as simple as applying for a new credit card can cause problems. Making a large purchase can shift your debt-to-income ratio and may disqualify you from your current loan offer. You don’t want to jeopardize your record low interest rate by dropping a lot of cash on a big item like a new car or equipment for your fantastic new home gym. After closing, set some cash aside for surprise home repairs, and then decide if you really want to add a new car payment to your monthly bills. If something comes up that makes a major expenditure necessary before closing, call your Home Loan Expert first.
Don’t change jobs.
There are exceptions to this one. If you’re offered a promotion, take it! Keeping a consistent job and income history is important. You’re not locked into your job forever, just be wise about making a change and wait until after you’ve closed.
Follow through with lender requirements.
Make sure you get all your paperwork submitted completely and on schedule. Delays can cost you money! Your locked-in rate will expire depending on your agreement and you may be subject to a change in interest rates. Also, every loan is different. A VA loan for a purchase will require you to provide different paperwork than an FHA Streamline refinance.
Show up prepared for your closing.
Go through all your required paperwork well before your scheduled closing. You don’t want to find out at the table that you’ve got a discrepancy or are missing a document. Make sure you bring enough money to your closing. You’ll need your full down payment, money for any points, insurance (if required) and closing costs. Get a detailed description of all the cash you need to have on hand, so your deal doesn’t fall through. And, I use the word “cash” very loosely. Find out what types of payment are accepted for your closing; you may need to do a direct deposit or get a cashier’s check.
You have the power to make or break your mortgage. Follow these tips and you’ll be relaxing in your new (or newly refinanced) home in no time!