Making sure your mortgage closes

How to avoid costly mistakes before you have keys in hand

Many homebuyers do not realize that even with an approved mortgage and after meeting the necessary financing conditions, they are not guaranteed a loan until it has funded on the closing date.

There are several things to consider to ensure a mortgage closes smoothly, and on time.

The first thing is avoiding the need to take on additional credit. While it may be tempting to load up on new furniture and appliances, do not apply for a loan to buy them. Even an interest-free, no-payment loan can affect whether someone qualifies for a mortgage. Wait until you have the keys to your new house before borrowing money. The same advice applies to buying new vehicles or toys. It is amazing how many people purchase houses and cars at the same time. Without checking with a mortgage professional first, borrowing money for any reason can create a catastrophe when it comes time to closing on a new home.

It is also important to pay attention to any investments being used for the down payment. If the stock market drops like it has in the last couple of weeks, homebuyers can find themselves short when it comes time to cash in.

And borrowing it from somewhere else may not be an option.

Closing a mortgage also requires homebuyers maintain employment. If a buyer quits his or her job before taking possession of their property, the lender has the right not to fund their mortgage.

And even if he or she gets a new job, the lender still may not fund the mortgage if there's a probationary period – regardless of whether it pays more.

Another consideration is whether the mortgage closes on time. In some cases, if the closing date changes, borrowers may lose their rate hold, forcing them to pay more for a mortgage.

The process of getting and closing a mortgage is an exercise in communication between a buyer, REALTOR® and mortgage professional. Proper communication is key, so make sure everyone is aware of any potential issues or changes to your financial situation right away. If you are unsure if something will affect your mortgage, ask.

Nolan Matthias holds a bachelor of arts in Economics, is the co-founder of Mortgage360 and the author of The Mortgaged Millionaire. Call Nolan at 403-615-6132 with your questions or to set up an appointment with an Accredited Mortgage Professional (AMP).