Avoiding Pitfalls: What Not to Do Once Your Home Offer is Ratified

Purchasing a new home is an exciting milestone, but it requires cautious steps even after your offer has been ratified. A ratified contract means both parties have agreed to the sale; however, the deal isn't finalized yet. Here, we'll explore key actions buyers should avoid to ensure a smooth transaction from ratification to closing day.

Avoid Major Lifestyle Changes

First and foremost, maintaining stability in your lifestyle is critical once your contract is ratified. Quitting your job, changing careers, or even shifting to a different part-time job can send red flags to both your lender and the seller. Such alterations could jeopardize your loan approval, especially since lenders monitor your employment status until the very end. If you must change your employment, promptly notify your mortgage lender and provide any requested documentation to support your financial standing.

Don't Make Large Financial Transactions

Next, resist the temptation to make any significant financial transactions that could affect your savings or credit score. Buying new furniture, an expensive vacation, or even a new car should be postponed until after closing. Large expenditures can lower your available funds and alter your debt-to-income ratio, crucial metrics considered by your lender. Additionally, transferring large sums of money between accounts or suddenly depositing large amounts of cash can be perceived as suspicious activity by financial institutions.

Hold Off on Opening New Credit Lines

Once your mortgage application is in progress, steer clear of opening new credit lines or taking on additional debt. Every new credit inquiry reflects on your credit report and can lower your credit score temporarily. This drop may affect your mortgage interest rate or, in worst-case scenarios, disqualify you from loan eligibility. Even seemingly harmless actions like opening a store credit card to earn a discount can have unintended and severe consequences.

Avoid Ignoring Your Bills

Continue to pay all your current bills on time, including your credit cards, utilities, and loan payments. Falling behind on any payments can affect your credit score and raise concerns during the final underwriting process. To avoid missing any payments, set up automatic payments where possible, so bills are paid on schedule even amid the chaos of moving preparations.

Don't Skip the Home Inspection

A home inspection is not just a formality; it is a critical step in identifying potential issues with the property. Skipping this process might seem like a way to save time or money, but it could lead to costly repairs down the line. Attend the inspection if possible, and ask questions to understand any potential issues fully. Trust your real estate agent to negotiate any necessary repairs or concessions based on the inspection report.

Refrain from Making Assumptions

Lastly, don't assume that everything is on autopilot after the initial agreement is signed. Stay in constant communication with your real estate agent and mortgage lender to ensure all required documents and actions are completed timely. Missing key deadlines or overlooking required paperwork can cause delays or even derail the purchase altogether.

In summary, once your offer has been ratified, maintaining financial stability, avoiding large financial transactions, and staying the course with your current financial responsibilities are critical to ensuring a smooth transaction. By sidestepping these pitfalls, you'll be well on your way to turning that ratified contract into a closed deal and moving into your new home without unnecessary complications.