5 Items To Wait To Buy Until After Your Mortgage Loan Closes

It’s perfectly normal to be excited about finally purchasing the home you’ve always dreamed of.

Now you’re ready to ditch the hand-me-down furniture you’ve used for years and pick up that new matching bedroom set. There’s only one problem. Your mortgage loan hasn’t closed yet. It’s common to think that buying a few pieces of new furniture (or making other large purchases) is OK as long as you’re not paying any interest or don’t have to make any payments until after your mortgage loan closes.

Unfortunately, even with 0% financing and no payments until the following year, the furniture store (or other creditor) is still going to run your credit, which could cause a temporary drop in your credit score.

New federal regulations require mortgage lenders to monitor credit throughout the application process all the way through closing, even after the loan has already been approved. Buying that “must have item” could potentially cost you your ability to buy your dream home. Applying for and/or obtaining new debt of any sort can impact your credit score, your debt-to-income ratio, your monthly obligations and your overall credit and affordability profile which increases the risk level you have as a buyer trying to get a loan.

Here are 5 things you should avoid buying during the loan process:

1. New furniture

We know you can’t wait to pick out that new sectional and we’re super excited for you to have the new living room to put it in. Help us make that a reality and save the purchase until after closing.

2. Cars, boats, etc.

Even if you’ve saved and budgeted for a new car or toy, they still may have to run your credit. Save yourself the headache and wait until your loan has closed.

3. Large appliances

Similar to new furniture, many homebuyers can’t wait to get that new stove or refrigerator for their new kitchen. Just like furniture stores, many appliance vendors offer no interest financing. However, they still run your credit and the debt may have no payment due now but it still has to be considered into your debt profile. Wait until after closing!

4. Clothes

Clothes? Yes, clothes. It’s so easy to overlook something as simple as signing up for a department store credit card. However, just like applying for any other form of credit, clothing stores also run your credit when you sign up to save that 10% on your purchase. The result could drop your credit score just enough to hamper your home purchase.

5. Anything on Credit

By now, you’ve probably spotted the trend. Any purchase that requires you to obtain credit, even at no interest, should be avoided during the loan process.  Even if you don’t intend to buy anything, it’s tempting to sign up for that great credit card offer you just received with 50,000 points/miles.

If you’re unsure about a purchase (even a large cash purchase), the safe bet is to call your Summit Mortgage Loan Officer first. If they tell you it’s OK to make that large purchase you’re looking at, you can, at the very least, rest easy knowing you didn’t jeopardize your mortgage loan with your purchase. Don’t have a loan officer yet? Simply complete our Quick Start Form to get matched with a loan officer for a free consultation and let a Summit team member guide you through every step of the process.