However, during the underwriting process leading to the closing process, the home-buyer leased a new car. That new debt had a negative effect on his debt-to-income ratio, and his credit score was affected as well. Him leasing this new car made it much more challenging to get the loan approved. In the end, we were still able to get things sorted and the buyer got his dream home. However, leasing the car was a big mistake that could have sent everything awry. I tell every buyer I work with upfront that there are seven things to not do while in the process of buying a house.
#1 is purchasing or leasing a car, as seen.
#2 is changing jobs. Most lenders, to approve a loan, require employment at a new job at least 30 days before approving a loan. It can be even more time for some lenders. If the borrower is on a 1099 income (independent contractor), or on commission income, lenders often require a year. I tell borrowers that if they have found their dream house, stay at your current job. If you want to switch jobs, do so after you’ve closed on your house. #3 is buying expensive furniture in anticipation of the move to a new home. When they’re moving up in the world, the home- buyers/borrowers know they need a new washer and dryer, new kitchen appliances, and new furniture. The impulse is to arrange for those items prior to closing and moving in using either credit purchases or cash reserves (savings). This is a very bad move. As in a new car purchase, this can send the borrower’s debt- to-income ratio askew. Wait to purchase these items until after closing to ensure a smooth close. #4 is running credit reports. I tell borrowers not to run credit reports or initiate a third-party credit check (new cell phone
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