Being approved for a mortgage can be a lengthy process in itself, but once you’re approved, it doesn’t mean you are 100% guaranteed the mortgage loan. One of the most important things you can do while approaching your closing date, after being approved for a mortgage loan, is leaving your credit alone.
Most lenders order a second credit report for the mortgage borrower just a few days before closing. Do not open any new accounts or credit cards. Do not buy a car. Do not buy anything such as furniture for your new home using credit while you are waiting to close on your new home.
New credit lines and maxed out credit cards will lower your credit score. If you were right on the edge of being approved when you qualified for your mortgage loan, even small credit changes can cause a lender to reject your application at the last minute.
Just opening account without even using it can be a mistake. Many retailers will offer discounts to those who open a credit line with that retailer. While going through the mortgage process prior to your closing, avoid taking advantage of these discounts, as it could affect your ability to close on a mortgage approval.
If you are buying something for your new home, use cash whenever possible during this period. Charging up your credit cards will change your debt-to-income ratio, which can affect your mortgage qualification at the last minute. It’s always best to purchase these items, especially when using credit, after the closing.
Once you’ve been approved for a mortgage, hold off on doing anything at all that can affect your credit to ensure a smooth closing.