Things you shouldn’t do before you close on your new home

Once you’ve satisfied all the conditions of your offer and your deal firms up there are a number of things that you shouldn’t do before you get the keys.  Here are a few of them…

1. Don’t buy a car. Buying a vehicle through a loan increases your debt-to-income ratio, which is one of the deciding factors that lenders consider.

2. Don’t buy furniture on credit. Charging any big-ticket items also increases your debt-to-income ratio. If you have to, do it afterHouse you get the keys to your new home.

3. Don’t change your job and definitely don’t become self-employed. You want to show lenders stability and an income stream that can pay off the mortgage.

4. Don’t change banks. Just like your job, you want your banking history to show stability.

5. Don’t make large deposits into your bank accounts. Lenders like to see that the money for your down payment has been in your account for at least three months or so. Otherwise it looks like it was given to your for the purchase or you got an undisclosed loan from somewhere.

6. Don’t be late on your credit card payments or charge excessively. You need a track record of responsibility that shows you Housecan manage your money.

7. Don’t apply for new credit cards or prompt any other inquiries into your credit rating. Looking for new credit translates into higher risk for lenders. Opening credit accounts within a short period of time represents some risk, and your credit score could decrease.

8. Don’t co-sign a loan for anyone. Even if you’re not making the payments on that loan, co-signing increases your debt-to-income ratio.

9. Don’t spend the money that you need for closing costs. Part of the price of financing a loan is closing costs.  There’s often know way of knowing exactly what they’ll be, but I always suggest that my clients budget about 2.5% of the price of the property to cover them.

If you’re looking to buy or sell property in Toronto, just pick up the phone and give me a call 416-671-5775.

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