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After home buyers get preapproved for a loan<\/a>, they aren\u2019t guaranteed a swift ride to closing. If they make a financial misstep, they could face a change to their mortgage<\/a> terms and interest rate or even have their mortgage denied.<\/p>\n Here are some tips with their finances they\u2019ll want to avoid on their road to closing:<\/p>\n Read more<\/strong>: Parents May Need a New Mortgage Perspective<\/span><\/p>\n<\/blockquote>\n Don\u2019t move your money around. <\/strong><\/p>\n Your buyers may have been storing their cash reserves. Warn them not to move that money out of savings and into stocks, or anywhere else for that matter. \u201cYou\u2019d think that isn\u2019t a big deal, but we\u2019re counting how much money you have going into closing,\u201d says Casey Fleming, a mortgage adviser and author of The Loan<\/a> Guide: How to Get the Best Possible Mortgage<\/em>. \u201cWith savings, we count that as 100 percent, but with stocks we only use 70 percent of the value because stock prices can change. So, if you have $100,000 in savings and you move that into stocks, suddenly you only have $70,000 from an underwriter\u2019s perspective.\u201d Lenders<\/a> want to see buyers have enough for the down payment, closing costs, and at least three months of mortgage payments.<\/p>\n Applying for new lines of credit.<\/strong><\/p>\n Watch how many times you apply for a new credit card or request a credit limit prior to closing. \u201cSome credit inquiries are OK, but not all of them\u2014and you don\u2019t know which is which,\u201d warns Glenn S. Phillips, CEO of Lake Homes Realty. \u201cWorse than the actual hit on your credit score is any pattern of trying to borrow more money from more companies all at once. This suggests you are not wise with your money and just out running up debt you may not be able to repay.\u201d<\/p>\n Heading out on a shopping spree.<\/strong><\/p>\n Now is not likely the best time to buy too much new furniture<\/a>, new appliances, or even a new car. \u201cBecause lenders often run credit reports within hours of the scheduled closing, running up new large debt is an awful idea,\u201d Philips says. \u201cIt can change debt ratios, change your interest rate (which may also kill your mortgage approval), and even lead<\/a> to a lender deciding you have too much debt and (you are) not worth the risk anymore.\u201d You can still put small charges on your credit cards. You aren\u2019t required to have a zero balance to get approved. But for any big-ticket items, it may be best to wait until after closing.<\/p>\n Source: \u201c5 Stupid Money Mistakes That Can Get Your Mortgage Denied,\u201d realtor<\/a>.com\u00ae (March 13, 2017)<\/em><\/p>\n<\/div>\n [ad_2]\n
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