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Purchasing a home involves much more than just settling on a price with the seller, as anyone who has done it can attest. It’s not called the closing “process” for nothing—the days or weeks that pass between accepting the terms of the contract and actually taking a seat at the closing table are full of challenges and possible setbacks!
You will likely be inundated with advice from your mortgage lender and real estate agent during the closing process. The latter will be particularly strict in ensuring that you comprehend that this is most definitely not the time to charge a major vacation or purchase a new car to your American Express, lest you make a financial decision that will obstruct the underwriter’s ability to complete your mortgage loan.
However, what happens after you’ve closed on the house? Although it’s true that once you have the keys in your possession, you can stop worrying about every financial decision you make, there are still a few things you should be aware of.
With the assistance of Michael Marino, a 17-year veteran real estate agent in Las Vegas, we’ll guide you through the mistakes to avoid making following a home closing.
Congratulations! You’ve finally closed on your dream home. It’s time to celebrate, right? Not quite. While it’s certainly a time for joy, it’s also important to be mindful of certain things you should avoid doing after closing. These actions could jeopardize your mortgage, impact your finances, or even put your safety at risk.
Here are 7 things you should absolutely avoid doing after closing on a house:
1. Don’t quit your job. This may seem like a no-brainer, but it’s important to remember that your income is what qualifies you for your mortgage. Quitting your job before you’ve settled into your new home could put you at risk of defaulting on your loan.
2. Don’t go crazy with credit. Just because you’ve closed on a house doesn’t mean you have a blank check to spend. Remember, you still have a mortgage to pay, and racking up debt could make it difficult to meet your monthly payments.
3. Don’t forget to change the locks. This is a crucial step for ensuring the safety of your new home. You don’t know who may have had access to the previous keys, so it’s important to change them as soon as possible.
4 Don’t rush into renovations It’s tempting to want to start making changes to your new home right away, but it’s important to take your time and plan carefully. Rushing into renovations could lead to costly mistakes or projects that you later regret.
5. Don’t forget to update your address. This may seem like a small detail, but it’s important to update your address with all of your important providers, including your bank, employer, and utility companies. Otherwise, you could miss important bills or correspondence.
6. Don’t ignore your neighbors. It’s always a good idea to introduce yourself to your new neighbors and establish a friendly relationship. This can be helpful if you ever need assistance or just want to feel more connected to your community.
7. Don’t refinance right away. While refinancing your mortgage can sometimes save you money, it’s important to carefully consider the costs and benefits before making a decision. Refinancing too soon could actually end up costing you more money in the long run.
Bonus Tip: Keep all of your important paperwork in a safe place. This includes your mortgage documents, closing paperwork, and homeowner’s insurance policy. You’ll need these documents for reference in the future, so make sure you know where they are.
By following these tips, you can avoid common mistakes and ensure a smooth transition into your new home Remember, buying a house is a big investment, so it’s important to be mindful of your finances and make smart decisions.
Additional Resources:
- Orchard Mortgage: https://orchard.com/mortgage
- HomeLight: https://www.homelight.com/
Frequently Asked Questions:
Q: What is the most important thing to avoid doing after closing on a house?
A: The most important thing to avoid doing is anything that could jeopardize your mortgage. This includes quitting your job, going crazy with credit, or making any major financial decisions without consulting with a financial advisor.
Q: How soon after closing can I start making renovations?
A: There is no set timeframe for when you can start making renovations. However, it’s important to carefully plan your projects and make sure you can afford them before you start any work.
Q: Do I need to change the locks on my new home?
A: Yes, it is highly recommended that you change the locks on your new home as soon as possible. This is to ensure the safety of your home and your belongings.
Q: What should I do if I have questions about my mortgage?
A: If you have any questions about your mortgage, you should contact your mortgage lender. They will be able to answer your questions and provide you with the information you need.
Q: How can I stay organized after closing on a house?
A: There are a few things you can do to stay organized after closing on a house. First, create a checklist of all the tasks you need to complete, such as changing your address and updating your insurance. Second, keep all of your important paperwork in a safe place. Finally, don’t hesitate to ask for help from your real estate agent or mortgage lender if you need it.
By following these tips and avoiding common mistakes, you can ensure a smooth and successful transition into your new home. Congratulations on your new purchase!
Don’t forget to set up autopay
The majority of lenders will provide you with the option to set up automatic payments so that your mortgage payment is automatically deducted from your bank account each month.
To ensure that you don’t get so caught up in your move that you forget to make a payment, get in touch with your mortgage loan servicer as soon as possible! Some lenders will have an online portal where you can log in and enter your bank details immediately, while others might require you to do this over the phone. Either way, it beats sending a check via snail mail every time you need to make a payment.
Don’t go crazy with credit
You may have needed to maintain a stable financial situation in order for your final mortgage approval, but after the house closing, you should be free to spend whatever you want, right?
Even though the bank won’t come to your house and take back your loan because you bought an expensive couch shortly after buying a house, this is still probably not the time to go crazy with expensive purchases. Before going overboard on luxury furniture purchases, it’s wise to give yourself some time to settle into the house and decide what you need and don’t need. This is in addition to keeping in mind your impending mortgage payments.
It is quite possible that once you move in the bed, nightstands, and corner desk you already own, the expensive vintage armoire you have your eye on for the guest bedroom won’t fit very well. And what happens if you’ve already committed to buying a ten-person table, but you change your mind and decide the formal dining room would be a better home gym than a stuffy sit-down area?
Put another way, even though you won’t be in danger of losing your ability to purchase your house due to a poorly timed purchase, you should still think about giving your credit lines some wiggle room.