The closing process is an exciting time! You are in the final steps to owning your new home. But much like Indiana Jones walking through the Temple of Doom, you don’t want to make a wrong step setting off booby traps and ruining the deal!
Don’t worry, with our map; you won’t be stepping into any traps that could kill your deal.
Booby Trap Number 1: A Leap of Faith to a New Job
When purchasing a home with financing, your lender looks at multiple things when determining a loan amount, one being your income. So it can be an immediate deal-killer if you quit or change companies. Often, lenders will do day-of employment verification. Day-of verification means they call your employer the day of closing to confirm employment. You don’t want them calling to find you are no longer employed!
Booby Trap Number 2: Signing up for new credit cards
Another thing mortgage lenders take into consideration during the loan process is your credit number. This number will determine if you receive a loan and at what rate. Avoid doing anything that could mess with your credit score. This could be applying for a new credit card, taking out a personal loan, or making late payments.
Booby Trap Number 3: Making large purchases
Spoiler alert: making large purchases such as buying a car, furniture, or appliances can affect your debt to income ratio, credit score, and bank statements. Lenders consider all these things when qualifying for a loan. Lenders and underwriters could monitor all this during escrow. Wait until after you close to buy any camels.
Booby Trap Number 4: Paying off Large Credit Cards
Unless your lender requests paying off existing accounts, DON’T. Paying off accounts can negatively affect your credit score and will mess with your debt-to-income ratio. These are two things your lender will look at when issuing a loan.
Booby Trap Number 5: Switching Banks
Your lender could request 90 days of bank statements. If you are moving money around, they will most likely want to see those accounts too. Keeping all your funds in the same location is a crucial tip to a smooth transaction.
Booby Trap Number 6: Quitely Leaving Town
You will need to be present to sign your closing documents in front of a notary. If you plan to be out of town at any point in the transaction, let your lender and escrow officer know immediately. It is best if you are in town to sign your documents. Being gone can delay the closing process.
With this map, you are sure to make it to your closing date and, as Indy would say, find “Fortune and glory, kid. Fortune and glory.” If you have more questions throughout the process, think of us as your Short and Willie, we are here to help!
Pioneer Title Agency is a full service company with an operating philosophy of "Commitment to Service." The company provides title insurance, escrow, account servicing, trustee sales, as well as builder related trust services through more than 70 offices in Arizona.