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3 Things that Will Ruin Your Closing

Even if you’ve found the perfect house for your next real estate investment, you’re not out of the woods yet. If you’re buying a home, it’s important to remember that the process isn’t over until there’s ink on the paper. Make sure to avoid these three last-minute mistakes as your closing day approaches:

1. Buying anything on a payment plan. Your lenders will keep a very close eye on your credit score right up until your mortgage has been signed for. As tempted as you may be to purchase a new entertainment center or set of furniture for your new house, don’t make any major purchases until you’ve got the keys to the house in your hand. Every payment-plan purchase forces a hard inquiry into your credit rating, which will ding your score by about 30 points for a short time. Although this ding will go away in time, you can be sure that your lenders will increase your interest rate if and when they notice it – which can cost you thousands of dollars on a 15-year mortgage.
2. Leaving your job. Lenders require a proof and history of employment in order to determine the terms of your mortgage, and if you abandon your place of work right before closing day, you can kiss these precious documents goodbye. Even if you’re offered a better job with a new company, ask them to wait until you’ve got the house title in your name before starting.
3. Ignoring closing costs. Although it’s common for the seller to pay most of the closing costs of real estate transactions (such as title transfer fees, attorney fees and brokerage commissions), you’re still going to be expected to cover at least a portion of these expenses. After you and the seller come to an agreement, make sure you have about $1,000 in your checking account to contribute to the costs of officially closing the sale. If you don’t, you could find yourself in hot water pretty quickly.

When you’re buying a home, you want your closing to go smoothly. It’s a smart move to put yourself on financial lockdown the moment you commit to the purchase and to keep your hands off your wallet until you’re safe and secure inside your new house. If you save your money and avoid job transfers or other actions that will alter your financial records, you’ll save yourself a lot of trouble down the line.