Buying a home is an exciting journey, but the path to closing can be fraught with potential pitfalls. One misstep can delay or even derail your mortgage approval. To help you navigate this critical phase, here are six common mistakes that homebuyers often make, and how avoiding them can ensure a smooth closing process.

  1. Changing Jobs

Switching jobs right before closing on your mortgage can send up a red flag to lenders. Your income stability is a crucial factor in mortgage approval, and a new job—even if it pays more—might disrupt this stability. Lenders prefer to see consistent employment to assess your ability to repay the loan.

  1. Making Large Purchases

It can be tempting to splurge on new furniture or appliances for your new home, but large purchases can significantly impact your credit score. Big-ticket items often require financing, which can increase your debt and lower your credit score. It’s best to hold off on any major expenses until after the closing is finalized.

  1. Taking on New Debt

In the lead-up to closing, it’s essential to avoid taking on new debt. Whether it’s a car loan or a new credit card, additional debt can alter your debt-to-income ratio, making you appear riskier to lenders. This can lead to a higher interest rate or, worse, a denial of your mortgage application.

  1. Closing Credit Accounts

Closing credit accounts might seem like a good way to streamline your finances, but it can actually harm your credit score. Lenders look at your credit history to determine your creditworthiness, and closing accounts can shorten that history. Additionally, it can increase your credit utilization ratio, which can also negatively affect your score.

  1. Missing Payments

Even one missed payment on any of your accounts can be a major red flag for lenders. Your payment history is a critical component of your credit score, and any missed payment can suggest that you might struggle to make mortgage payments on time. Keep all your bills up to date to maintain a positive payment history.

  1. Moving Money Around

Sudden large deposits or transfers in your bank account can raise questions from your lender. Lenders are required to verify your financial stability, and unexplained changes in your bank accounts can complicate this process. It’s best to keep your financial activities as steady and predictable as possible during the mortgage process.

How Safe Harbor Title Company Can Help

Navigating the mortgage closing process can be complex, but you don’t have to go it alone. Safe Harbor Title Company is here to provide you with the information and guidance you need to avoid these common mistakes. Our team of experienced professionals understands the intricacies of the mortgage process and can help you make informed decisions every step of the way. From answering your questions to ensuring all paperwork is in order, we’re committed to helping you close on your dream home smoothly and efficiently.

Don’t let simple mistakes stand between you and your new home. Reach out to Safe Harbor Title Company today to learn more about how we can assist you in making your homebuying experience as seamless as possible.