You’ve Signed a Mortgage, Great! Now What?
If you’ve just finalized your mortgage, it may feel like you just crossed the finish line of a particularly grueling race. What comes next? Unfortunately, in the spirit of the wisdom that holds that a homeowner’s work is never truly done (kind of like laundry), you’ve not quite crossed that finish line yet. While experienced homeowners and real estate professionals know that there are a lot of things yet to do still even after signing your contract, what often gets glossed over is what not to do once you sign as you wait to close.
That’s right, you still need to exercise a little bit of discipline, particularly with your finances, and not just because of your new upcoming mortgage payment. For one thing, if you’re like most Americans, you probably required a lender to finance your home. What you may not know is when you sign the contract, the lender typically monitors your credit – sometimes checking it an additional three or four times – before the whole thing is considered final. You can probably imagine where we’re going with this: any new lines of credit, checks on your credit score by other lenders, or anything which may adversely affect your score (even by just a few points) can wreak havoc on your plans and new home. In other words, don’t go financing furniture for your new home immediately after signing your contract, because it will show up and your lender will know about it; wait until the sale has actually been closed.
Lenders are allowed to continually monitor your credit in the weeks between signing the mortgage contract and closing the sale to make a final determination that you’re a creditworthy borrower, almost like a car insurance company putting a device to measure your speed and braking habits for a few weeks to determine what your premium should be. If your lender sees you opening lines of credit or your score being checked, it casts doubt on your ability to pay them back, because it implies spendthrift or careless habits. We’re not saying to hold off on that new car purchase or dining room set indefinitely; we’re saying don’t buy anything until after the closing date or unless you’re paying cash.
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