Congratulations! You're Approved! Now What?
The Do's and Don'ts After Your Home Loan Approval.

That email, that phone call – the words "Your loan has been approved!" can bring a wave of elation and relief. You're one giant step closer to holding the keys to your new home. However, the journey isn't over yet. The period between loan approval and closing is crucial, and missteps here can jeopardize your dream. To ensure a smooth transition to homeownership, here's a guide to the do's and don'ts after getting approved for a home loan:

The Essential Do's:

• Celebrate Responsibly: Take a moment to acknowledge this significant milestone. You've worked hard to get here! However, remember that this is not the time for major celebrations that could impact your financial stability.

• Stay in Contact with Your Lender: Your lender will likely have further instructions and documentation needed for closing. Respond promptly to their requests and keep them informed of any changes in your situation.

• Review All Closing Documents Carefully: When you receive the closing disclosure and other documents, take your time to read and understand every detail. Pay close attention to the loan terms, interest rate, fees, and closing costs. Don't hesitate to ask your lender or real estate agent for clarification on anything you don't understand.

• Confirm Your Closing Date and Time: Double-check the scheduled closing date, time, and location with all parties involved (lender, real estate agent, title company). Ensure it works for your schedule and make any necessary arrangements.

• Secure Homeowners Insurance: Your lender will require you to have homeowners insurance in place before closing.1 Shop around for the best coverage and rates, and provide proof of insurance to your lender as requested.

• Maintain Your Current Financial Situation: This is paramount. Lenders base their approval on your current financial profile.2 Any significant changes can raise red flags and potentially lead to the withdrawal of your loan.

• Prepare for Closing Costs: Understand the total amount of money you'll need to bring to closing. This includes your down payment (if not already paid), closing costs, and any prepaid items like property taxes or insurance premiums. Ensure these funds are readily available.

• Communicate with Your Real Estate Agent: Your agent will continue to be your advocate throughout the closing process. Keep them informed of any communication with your lender and rely on their expertise to navigate any potential hurdles.

• Attend Your Final Walk-Through: Before closing, you'll have the opportunity to do a final walk-through of the property.3 This is your chance to ensure the home is in the agreed-upon condition and that any negotiated repairs have been completed.
   

The Critical Don'ts:

• Don't Make Any Major Purchases: Avoid taking out new loans (car, furniture, etc.) or making large cash purchases. These actions can increase your debt-to-income ratio and negatively impact your credit score, potentially jeopardizing your loan.

• Don't Open New Credit Accounts: Refrain from applying for new credit cards or lines of credit.4 Even inquiries into your credit can slightly lower your score.5

• Don't Close Any Existing Credit Accounts: Closing accounts can negatively affect your credit utilization ratio, which is a significant factor in your credit score.6

• Don't Change Jobs: Lenders prefer stability.7 A job change during this period can raise concerns about your ability to repay the loan, even if your new job offers a higher salary. Inform your lender immediately if a job change is unavoidable.

• Don't Deposit Large Sums of Unexplained Money into Your Bank Accounts: Lenders need to source all funds used for the down payment and closing costs.8 Large, undocumented deposits can raise red flags and require extensive explanation.9

• Don't Co-Sign on Loans for Others: Taking on someone else's debt will increase your own debt obligations and can negatively impact your loan approval.10

• Don't Forget to Pay Your Bills On Time: Continue to pay all your existing bills (credit cards, utilities, etc.) on time. Late payments can damage your credit score.11

• Don't Ignore Requests from Your Lender: Respond promptly and thoroughly to any requests for documentation or information from your lender.12 Delays can slow down the closing process.13

• Don't Assume Everything is Final Until Closing: While loan approval is a significant step, unforeseen circumstances can still arise. Avoid making definitive plans (like moving trucks or parties) until you have officially signed the closing documents.
   

In Conclusion:

Getting approved for a home loan is a major achievement. By adhering to these do's and avoiding the don'ts, you can navigate the final stages of the home buying process smoothly and confidently. Remember that communication and transparency with your lender and real estate agent are key to a successful closing and the exciting moment when you finally receive the keys to your new home. Congratulations again, and good luck with the closing!