Here are a couple purchases buyers should (and shouldn’t) make before closing.
On the tail end of the home-buying process, there’s often a two-week window when there’s not a whole lot for the buyer to do beyond the final walk-through. Sometimes, they’ll take that period to go shopping for furniture and other home goods online. Today we’ll talk about what you should (and shouldn’t) purchase as you’re waiting to close on your home.
You shouldn’t buy furniture or other expensive items on your credit card before your transaction is closed since doing so could negatively affect your debt-to-income ratio. Skewing your ratio with large purchases could cause you to become ineligible for your home loan. Not all lenders check your credit again right before you close, but it can happen. It’s better to be safe than sorry.
On the other hand, you should obtain fire and hazard insurance for your home, especially when you’re getting a loan for the purchase. The lender needs to know that their money is protected. Similarly, you need to shop for homeowners insurance early in the process. We’ve seen scenarios when a buyer bought a home with a huge slab leak, and the renovation costs were bumped onto their insurance policy, raising their coverage costs every year.
In today’s market, interest rates are on the rise, which makes it even more important for you to be in a strong financial position during the home buying process. If you have any questions or would like to learn more, don’t hesitate to give us a call or send us an email. We’d love to help you.