If you are “in escrow,” you are probably no more than 30 days from closing on your new home. Here is a simple guide on what to do—and what not to do—during this period.
Stay close to home. Be available. Going on vacation or changing phone numbers is not a good idea. You need to be available to your lending, real estate agent and title company during this home stretch.
Sometimes last-minute items surface and time is always of the essence prior to closing. Most of your real estate transaction is time sensitive. If items are not addressed or completed within the time frames outlined, you could put your earnest money at risk.
Do not change jobs. Stability and consistency are necessary to give lenders a warm and fuzzy feeling. You really do not want to do anything during this 30-day period to put your earning capacity in doubt.
Do not decide to become self-employed. Once your transaction is closed you can move on and make a career change or pursue a new job. Just do not do it while you are in escrow.
Hold off on a new car. You are about to get a new house, so why not buy a new washer/dryer, dishwasher and refrigerator or new car?
Any big purchases will throw off your "debt-to-income ratio," which measures how much of your monthly income goes toward debt obligations. This is a ratio lenders consider when evaluating a loan application. You do not want to end up buying items for a home you don't have yet or worse, one that you lose because you increased your debt load.
You might even run into trouble if you pay for these items with cash, because lenders look at how much cash reserves you have when approving a mortgage. Instead, try to keep the balances on your credit cards low and don't take on new debt, which includes co-signing on a loan until after you close on your home.
Pay bills on time. Make sure to keep all your accounts current. Any late payment can jeopardize your credit score, which could cause you to not qualify. If you take on additional debt or negatively affect your credit, you could not only put the loan in jeopardy. You could put your earnest money in jeopardy as well.
Keep credit cards unchanged. Keep everything status quo during this 30-day escrow period. You can make changes with your credit cards after you close on your new home.
Don’t move money. Don’t move large amounts of money around. Keep everything status quo. Its only 30-45 days, so keep everything stable. You do not want to raise any flags or create questions, while in escrow.
During escrow, it is important to keep consistency in your financial life. Any changes can cause lenders to question your loan and qualifications.
It is only a 30-45 time period, so it should be easy to keep things consistent. Knowledge helps you navigate this process.
-To find out more about purchasing or selling your home any other real estate related questions, contact Ahwatukee resident and Associate Broker Stacey Lykins, West USA, 602-616-9971 or at S.Lykins@LykinsProperties.com or visit her website at www.LykinsProperties.com.