Getting a pre-approval is the first step in buying a home. You’ve watched your credit and purchases to make sure you qualify and get a great rate. Many people think that’s where the frugality ends, but don’t start shopping yet.
You’re going to need a lot of things for your new house. This is the point where people tend to start running the credit cards and opening new lines of credit. There’s one major problem with that – you don’t have the loan yet.
Just before closing, a lender will re-examine a prospective buyer’s financial situation – complete with a recent copy of the credit history and other updated information. If those numbers have changed for the worse (salary decrease, higher card balances, new lines of credit), then the applicant could get clocked with a higher interest rate or you could even lose the loan.
Never get new loans or start using credit cards more heavily until after you’ve actually closed on the home. For more information on what steps to take in buying your home call Helen today at 847.967.0022 or email [email protected].