By Wendy Mihm | Wednesday November 17, 2010
Right before you buy your first home, or any home, many of us get really excited and we want to buy things that make the new house a home. But this is how many people fall into one of the most common home buying mistakes of all: making a significant financial change right before closing.
How You Get Approved for a Home Loan
When you are approved for a home loan, you are approved based on a very thorough review of your financial situation exactly as it is at that very moment in time. That means the team who decided whether you were financially fit enough to pay off the loan looked at the income from your job, evaluated your credit score, and everything you owed on your current credit cards and other outstanding debts.
If you go out and do anything to change that picture, like making a significant purchase on a credit card, applying for an auto loan, or changing jobs, you can be immediately and unceremoniously disqualified for your home loan. And this can happen even if you are just a day away from closing escrow.
What this means in practical terms is that you should wait until after closing to do any of the following:
- Buy a car, boat or other vehicle
- Buy a lawnmower or other garden equipment
- Buy expensive electronics or furniture
I know it’s hard, but you’ll have to wait until after you’ve closed to furnish that great new place. But hey, at least this way you’ll actually have a new place to furnish!
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