You’ve done the exciting work: tirelessly searching listings, finding the perfect home, navigating competitive offers, and finally getting your offer accepted…these Home Buying Commandments are a must read. Congratulations! You are officially under contract—a monumental step towards homeownership.
This phase, from the moment the contract is signed until the closing documents are finalized, is often called “the escrow period.” While it might feel like the finish line is in sight, this is actually the most financially sensitive stage of the entire home-buying process. Many buyers, even experienced ones, underestimate the vigilance required during this time.
Your lender is continually monitoring your financial profile, and a seemingly small or innocent mistake could cause your loan approval to be jeopardized or even denied, sometimes just days before closing. To protect your earnest money and ensure a smooth path to getting the keys to your new home, you must adhere to a strict set of rules. Consider these your 10 Home Buying Commandments.
The 10 Home Buying Commandments: Protecting Your Loan Approval
The primary goal during the contract period is simple: maintain absolute financial stability. Your lender has approved you based on a snapshot of your finances. Any significant change to your income, debt, or assets can invalidate that approval. Each of these commandments is designed to keep your Credit Score, Debt-to-Income (DTI) Ratio, and Verified Funds exactly where they need to be.
1. Thou Shalt Not Change Jobs, Become Self-Employed, or Quit Your Job.
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The Lender’s Perspective: Lenders verify your employment multiple times throughout the process, often with a final check on closing day. Any change—even a promotion, a lateral move, or especially switching to self-employment—requires extensive new paperwork. This could cause significant delays or even rejection if your new income structure is deemed less stable or harder to verify, such as moving from a W-2 salary to a commission-only role.
2. Thou Shalt Not Buy a Car, Truck, or Van.
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The Lender’s Perspective: This is arguably the most common and devastating mistake. A new car loan immediately increases your monthly debt payments. This drastically alters your Debt-to-Income (DTI) ratio, which is a critical factor lenders use to assess your ability to repay the mortgage. Even a small increase in monthly debt can push your DTI above the lender’s allowable limit, leading to an immediate loan denial. Seriously, wait until after you close!
3. Thou Shalt Not Use Credit Cards Excessively or Let Current Accounts Fall Behind.
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The Lender’s Perspective: Lenders will perform a “soft pull” or even a final hard pull of your credit just before closing. Excessive credit card use increases your “credit utilization ratio,” which can lower your credit score. Even a seemingly minor drop in your score could invalidate your initial loan approval and change your interest rate. Letting any bill fall behind is an immediate red flag.
4. Thou Shalt Not Spend Money You Have Set Aside for Closing.
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The Lender’s Perspective: Your lender has verified that you have sufficient funds for your down payment, closing costs, and required reserves. These funds must remain in your account, accessible and verifiable, until closing. Spending this money means you simply won’t have the necessary capital to complete the purchase.
5. Thou Shalt Not Omit Debts or Liabilities from Your Loan Application.
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The Lender’s Perspective: Transparency is paramount. Underwriters are experts at finding all outstanding debts, from small personal loans to past-due medical bills. Omitting debts (even if you believe they are minor) is a serious breach of trust and can lead to the loan being withdrawn, as it signals a lack of honesty or a higher risk profile.
6. Thou Shalt Not Buy Furniture or Appliances on Credit.
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The Lender’s Perspective: Similar to buying a car, purchasing new furniture or appliances often involves opening a new line of credit or using the cash you need for closing. Both actions directly violate other commandments by increasing your debt or depleting your closing funds. Be patient; your new home will be there for new furnishings after closing.
7. Thou Shalt Not Originate Any Inquiries into Your Credit.
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The Lender’s Perspective: Applying for any new form of credit—whether it’s a store credit card, new insurance, or even some rental applications—generates a “hard inquiry” on your credit report. This temporarily lowers your credit score and signals to the lender that you are seeking new debt, which can trigger additional review or concern.
8. Thou Shalt Not Make Large Deposits Without Checking with Your Loan Officer.
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The Lender’s Perspective: Lenders must “source” all non-payroll deposits to comply with anti-money laundering regulations. If you receive a large cash gift, a bonus, or a transfer, notify your loan officer immediately. They will guide you on the proper documentation required (e.g., a gift letter) to avoid delays. Undocumented cash deposits can be a major red flag.
9. Thou Shalt Not Change Bank Accounts.
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The Lender’s Perspective: Your lender has meticulously established a paper trail for the funds in your current bank accounts. Switching accounts forces the loan officer to restart the verification process for those funds, which almost always causes significant, avoidable closing delays. Keep your funds exactly where they are.
10. Thou Shalt Not Co-Sign a Loan for Anyone.
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The Lender’s Perspective: When you co-sign for a loan (even for a family member or friend), that debt is legally counted against your Debt-to-Income (DTI) ratio. Even if you never make a single payment, the potential liability increases your risk profile and can easily push you over the maximum DTI threshold for which your loan was approved.
Beyond the Loan: 3 Non-Financial Closing Obstacles
While your financial actions are paramount, the transaction itself faces non-financial hurdles that can lead to unexpected delays. Your real estate agent often manages these issues, but it’s helpful for you to be aware of them.
1. Appraisal Issues
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The Challenge: Your lender requires an appraisal to confirm that the property’s market value is equal to or greater than the agreed-upon sale price. This protects both you and the lender from overpaying.
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The Impact: If the appraisal comes in low (below the contract price), the lender will only finance the lower appraised amount. This creates a “gap” that must be covered. You, the buyer, may need to bring additional cash to closing, or you and the seller will need to renegotiate the price. This process can significantly delay closing.
2. Title Defects and Survey Surprises
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The Challenge: The title company conducts a thorough search of public records to ensure the seller has a clear legal right to sell the property and that there are no undisclosed liens or claims against it.
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The Impact: Issues like unpaid property taxes, unreleased mortgages from previous owners, property boundary disputes (especially if a new survey reveals encroachments), or unrecorded easements can surface. These “title defects” must be legally resolved before the property can be transferred, a process that can be lengthy.
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3. Final Walkthrough Surprises
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The Challenge: Typically performed within 24-48 hours of closing, the final walkthrough is your last opportunity to ensure the property is in the agreed-upon condition, that all personal items have been removed, and that any agreed-upon repairs (from the inspection period) have been completed.
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The Impact: If the seller hasn’t vacated, failed to complete repairs, or caused new damage, you are not legally obligated to close until the contract conditions are met. This can lead to last-minute renegotiations or even a delay in receiving your keys.
Your Guide to a Guaranteed Closing
The period between going under contract and finally closing on your new home in Tulsa is a critical time for vigilance. While the excitement is palpable, adhering to these 10 Home Buying Commandments is essential for a smooth, stress-free closing.
Remember the golden rule for this phase: Maintain absolute financial and employment stability. If you are unsure about any transaction, large or small—whether it’s a new credit card application, a job change, or a large bank deposit—stop and ask your loan officer or your real estate agent first. They are your most important allies in navigating this high-stakes phase and preventing costly mistakes.
Understanding these 10 Commandments is step one, but navigating the entire process—from calculating your maximum budget to coordinating with the lender, inspector, and title company—requires a detailed playbook. Don’t leave your biggest financial investment up to chance. To ensure you have a complete, step-by-step roadmap for your entire journey, we’ve created the Complete Home Buyer Success Guide. This guide includes all the timelines, checklists, and local resources you need to confidently move from contract signing to closing day without a single costly mistake.
Ready to move forward with confidence, knowing you have a professional managing the entire timeline and ensuring a smooth journey from contract to closing?
Let’s secure your future home. Contact me today to start your stress-free home buying process.
