When you are in escrow, you're in the final stage of the home sale process. As you feel the proximity of purchasing a home, you can imagine yourself lounging in the front porch of your brand-new house or hosting barbecue parties in the backyard. Of course, you first have to provide the required payment so that ownership of the house could be transferred to you.
That final, victorious time is just around the corner, but you're not out of the woods yet. There are a number of missteps that can jeopardize your chances of loan approval. Below are the top three things that can totally mess up the escrow closing process:
A change in your work condition (specifically when you're going "solo," i.e., you make a decision to be self-employed) can make your creditor feel worried, leading them to doubt your capacity to afford the house you're purchasing. Making an employment switch right before you close on a house may put the deal on hold as your loan provider reviews your financial position. Lenders can reject lending when something like this turns up during last-minute verification.
Making a Big Purchase
You're purchasing a new residential property, so why not whip out your credit card to get a new plasma TV as well? A brand-new refrigerator and dishwashing machine are also in order. All are excellent supplements to your home, but bear in mind that huge purchases will throw off your debt-to-income ratio (a measure of how much of your monthly earnings is utilized to satisfy debt responsibilities), a significant point to consider for lenders. Do not assume new financial obligation so as not to end up hoarding things for a home that you wouldn't acquire anyway.
Transferring Big Sums of Money
Avoid moving large sums from one of your bank accounts to another without first checking with your lender. If any one of these changes go under your creditor's radar, they might wonder why. One possible instance that they may consider is that you have got other loans and now have more debt obligations than when you applied for the mortgage. You wouldn't want anything like this delaying or holding up your closing.
It's important to be on your toes when you're anticipating to close an escrow. It also pays to get professional document preparation services to make sure every little thing proceeds without a hitch. For more real estate closing ideas, browse through bankrate.com/brm/news/real-estate/buyerguide2004/closing.asp.
Closing an Escrow: On Its 3 Big No-nos