If you are getting a mortgage, you want to make sure you protect your debt-to-income (DTI) ratio and your credit scores (FICO®), right up until closing (FICO® is a person’s credit score calculated with software from Fair Isaac Corporation, in case you were ever wondering). Your FICO® scores can affect how much money a lender will lend you and at what rate. Higher FICO® scores can help you qualify for a lower rate, which can save you money. There have been times when buyers are so excited about their new home-to-be, that they start buying things that they will need. This can hurt your chances of the mortgage going through…right up to the closing. Here are some things not to do before buying a home:
1. Don’t Make Large Purchases
I know the urge to buy new furniture, appliances, etc. is normal, but don’t do it. Any time you put purchases on your credit, apply for new credit cards (even with no interest/no payments for a given period) or take out cash advances, it will affect your credit scores. If you have any questions about finances, call your lender. Remember, he or she is part of your team.
2. Don’t Lease or Buy a New Car
If you need to lease or buy a new car, hold off until after the closing, if possible. Buying a car, especially with credit, will go on your credit report and lower your FICO® scores. Remember the debt-to-income ratio. Buying a car with cash can still affect your score.
3. Don’t Change Jobs
It is best not to change jobs, if possible. Lenders like you to have a steady source of income, preferably from the same company or at least from the same type of industry. These actions are highly questioned, especially if they lead to your main income no
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