When buying a home and getting approved for a mortgage, it’s important to review any major changes with your mortgage broker first to assure that it will not affect your mortgage approval.
Things to avoid before your closing date when buying a home:
1) Changing your employment
Even if a promotion is available, it’s important to review the new employment opportunely with your mortgage broker. If you are changing from base salary, for example, to contract, hourly, bonus and so on, that can affect your approval.
Also, if there is a probationary period at your new employment, many lenders will want to see this period over, before the closing date.
All of this can have a potentially dramatic effect on your application.
2) Applying for new credit
With your new home closing date approaching, the purchase of furniture and other items can be very enticing. Especially with stores offering one year with no payments. Sadly this debt will have to be taken into account in your mortgage application and may affect your debt to income ratio. Even if you are not making payments on the debt for a year, a lender will still need to use 3% of the balance of the debt in their calculations.
A car loan is a major item to avoid before your closing date when buying a home, without talking to your mortgage broker in Ottawa first.
Also, with more credit checks, this will lower your score and it may drop below the minimum guidelines.
3) Missing a bill payment
Home inspections, visiting your real estate lawyer, packing and so on, can be very over whelming and a little distracting. Just one late payment can have a large negative impact on your credit score. Be sure to keep track of the minimum payment amounts and the due dates on a calendar so you do not miss one.
4) Changing your mortgage agreement without telling your Ottawa mortgage broker
Sometimes there is the opportunity to close your purchase sooner, for example, only to find out on the closing date that the mortgage isn’t there. If you change your price or closing date, your mortgage broker is not automatically notified. Therefore, it is important to inform them of the changes.
This will help assure a smooth closing for you.
5) Cosigning for a loan
Even though you are not making payments on the loan, the debt will have to be added to your liabilities and will affect your debt to income ratio. This may results in increasing the ratio above the allowable limit.