Getting pre-approved for a loan can be exciting and you might find yourself drafting budgets as well as execution strategies. However, as you continue to research, there are various things you should avoid during the closing process. Most lenders go through several processes and verification before disbursing the loan. If they sense any red flag or policy violation, they can disqualify your loan at the last minute. Whether you are looking for mortgage loans, business loans, or personal loans, it is recommendable to monitor the process from pre-approval to post-closure closely. Here are some of the things to avoid doing during the closing stages.
1. Making big-ticket purchases
Buying a large-ticket item such as a boat, appliances, car, jewelry, or expensive piece of furniture can affect your balances. These changes in your finance can also leave you in debt or void your eligibility for a loan. As such, you should avoid big-ticket purchases until the loan is released.
2. Changing marital status
You should leave your marital status as it is or inform the title company or lender of any changes. Marriage can affect how one holds a title, so documents must reflect the correct status.
3. Quitting or switching jobs
Switching or leaving your job in the closing stages can hurt your chances of getting a mortgage or loan. Moving to a lower position or new industry is also ill-advised. However, it is recommendable to report any demotions to ensure your details are updated, especially since lenders can call your employers to verify the information.
4. Switching banks
You should avoid switching banks or transferring a considerable amount to another financial institution. Large withdrawals are also a red flag for lenders. You should avoid making any changes to your credit profile, applying for new credit, or paying off any charges. If possible, do not touch your accounts much, unless your attorney advises it.
5. Fiddling with your credit report
Leaving the credit report alone is one of the essential tips for home buyers waiting for loan approval. It is recommendable not to touch your credit report in any way. This includes allowing anyone to run credit on your behalf. Such requests may not settle well with lenders as they pry up more questions and risks.
6. Credit card purchases
When looking to get pre-approved for a mortgage, you should avoid any credit card purchases, however, everyday transactions should be ok. Do not put any item on layaway or purchase anything using the credit card. Not even a dryer or dishwasher. Instead, use cash or ask a friend to lend you their card.
7. Make Changes to Debt
Don’t pay any debt off until you speak with your lender. Paying debt off could affect your credit negatively & make your credit scores fluctuate. Any financial changes both positive and negative should always be discussed and with the lender to ensure a smooth lending process.
Closing a mortgage
There are various other things to avoid if you don’t want closing stage cancellation. For instance, if you are looking to purchase a home in the Greater Portland Maine or seek pre-approval for a mortgage, you should avoid paying your bills late. The closing process involves verifying every detail of your application and minor changes can result in delays and requests for further clarification. As such, you should always be available for questioning and answer anything your lender wants to know.
For information accuracy, you should avoid changing too much about your life. This includes work, physical address, finances and investments. It is called the status quo. You should try to maintain the status quo as much as possible between the initial pre-approval and final approval. A general tip for home buyers is to read through what to do during and after the closing process. Also, have all your details and documents ready in case they are needed.