Congratulations! A seller has accepted your offer to purchase a home, inspection is clear, and now you get to hurry up and wait. However, now is not the time to start buying furniture or a new car to go with your pretty new home. I tell my clients that just because an offer is accepted, the deal isn’t done until ALL the papers are signed. Here are the five things I tell people about money when they’re under contract.
Don’t change your marital status. If you’re engaged, please don’t elope before the closing. If you’re thinking about getting divorced, try to hold off on buying the house until after that’s been settled. It’s so much easier to have one major life change at a time, especially one that can impact your finances.
Don’t switch jobs. A lender wants to be sure you have a consistent job history and that the conditions are the same from when your loan was approved to when you close on your home.
Don’t make a large purchase that would impact your debt-to-income ratio. If you decide to buy a new car to go with your new house, wait until after you’ve closed on the home. You don’t want to do anything that will impact your credit score because lenders will check it again right before closing and this can cause a deal to fall through. Seriously, I made Barry drive a 15 year old hand me down from his mom once because he was in between cars and we were trying to buy! If we can do it, you can do it!
Don’t switch banks or move money around. A mortgage is approved based on your current financial status so make sure that status remains relatively unchanged. If there is an emergency and you need to change something with your finances, always check with your lender first to see the best way to go about it.
Don’t pay off or open any new accounts. This goes back to your debt-to-income ratio and your credit score. While it may seem like a good idea to pay off that student loan, wait until you close on your home. If you pull too much money from savings before your closing, your liquid finances will be different from when you were first approved for your home loan. Also, any time you open a new account, your credit is pulled and that will always ding your credit score.
My best advice when purchasing a home, hold off on changing anything to do with your finances until after everything is signed. If something comes up, make sure to speak with your lender before making any major decisions.
Cheers to your new home and keep that money where it is for the time being!