5 Items to Wait to Purchase Until After Your Mortgage Loan is Finalized

It’s totally natural to feel excited about finally buying the home of your dreams.

Now, you’re ready to replace the hand-me-down furniture you’ve been using for years and invest in a brand-new bedroom set. However, there’s a small hiccup. Your mortgage loan hasn’t closed yet. You might think it’s fine to buy a few new furniture pieces as long as you aren’t paying any interest or making any payments until after your loan is finalized.

Unfortunately, even if you’re getting 0% financing and deferring payments until the next year, the furniture store will still run a credit check, which could temporarily lower your credit score.

Recent federal regulations mandate that mortgage lenders run another credit check just before closing, even if the loan has already been approved. If you were near your credit limit for securing your desired interest rate, simply purchasing that new furniture before closing your mortgage loan might be enough to cause a delay or even prevent the loan from closing at the rate you were hoping for. Similarly, taking on new scheduled debt payments, regardless of whether you’re paying interest or not, could impact your debt-to-income ratio. If your ratios were already close to the limit, these additional payments might disqualify you or, at the very least, delay the closing process.

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To err on the side of caution, here are five items you should refrain from buying during the loan process:

1. Brand-new furniture

We understand that you’re eagerly looking forward to picking out a new sectional sofa, and we’re genuinely excited for you to enjoy your new living room. Help us make that dream a reality and hold off on the purchase until after the loan has been finalized.

2. Cars, boats, and similar items

Even if you’ve diligently saved and budgeted for a new vehicle or recreational toy, the dealership or seller will still need to run a credit check. Save yourself the hassle and wait until your loan has officially closed.

3. Major appliances

Just like new furniture, many homebuyers can’t wait to have that shiny new stove or refrigerator in their brand-new kitchen. While appliance vendors frequently offer no-interest financing, they still run a credit check. It’s best to make these purchases after your loan has been finalized.

4. Clothing

Yes, even clothes. It’s easy to overlook something as simple as signing up for a department store credit card. However, just like any other form of credit application, clothing stores also run a credit check when you sign up to receive a discount on your purchase. This could potentially lower your credit score enough to jeopardize your home purchase.

5. Anything purchased on credit

By now, you’ve probably noticed the pattern. Any purchase that requires you to obtain credit, even if there’s no interest involved, should be avoided until after the loan process is complete. Even if you have no intention of buying anything, it’s tempting to sign up for that amazing credit card offer you just received, promising 50,000 points or miles. If you really want to take advantage of the special offer, simply call the credit card company and inform them that you’re in the process of buying a home. Chances are they will honor the offer after your loan has closed.

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If you’re unsure about a particular purchase, it’s always best to contact your Summit Mortgage Loan Officer first. They can advise you on whether it’s safe to make that major purchase you’re considering. At the very least, you’ll have peace of mind knowing that your mortgage loan isn’t at risk because of your buying decision. Don’t have a loan officer yet? Just complete our Quick Start Form to get matched with a loan officer for a free consultation. Let a Summit team member guide you through each step of the process.

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