Five Things You Can Do to Ensure a Smooth Closing Process

Think of the mortgage process, from start to finish, as a series of snapshots of your finances.

At the moment you were prequalified for a loan, one snapshot was taken. When you finally close on your dream home, another snapshot is taken. It's very important that those snapshots match!

Here are five things to know about maintaining your financial profile as you search for the perfect home:

• Steady employment. Consistency is key! Any changes you make to your employment status could slow down the closing process significantly.
• Avoid big transactions. Depositing or withdrawing any large amounts of cash might raise some red flags during the mortgage process.
• Make punctual payments. Of course, you never want to miss a bill payment. But it's especially important during your prequalification period. A late payment can impact your credit score and affect your eligibility for a mortgage.
• Consistent credit utilization. Keep your credit card balances in check. Try not to max out your cards or significantly increase your balances, as this could change your debt-to-income ratio and influence your mortgage approval. For this same reason, avoid paying off and closing any credit cards during this time.
• Don't make large purchases. While it might be tempting to buy a comfy new sofa to complete your dream home's living room, it's best to hold off on those significant purchases until after you've closed. Financing new furniture or other household items will affect your score.

By following these tips, you're going a long way toward making sure your financial snapshot looks the same now as it does when you sign on the dotted line. Happy house hunting!