Welcome Home Wednesday - Don’t Buy That Car
Don't Buy That Car.
What Not to Purchase Between Contract and Closing
You're under contract. Congratulations. Now put the credit card down. Here's exactly why the weeks before closing are the worst possible time to make a major purchase.
Getting under contract on a home is one of the best feelings in the world. After the showings, the offers, and the negotiations, you finally have a signed agreement and a closing date on the calendar. It's natural to want to celebrate and start planning. Maybe a new couch for the living room. A bedroom set. A car that actually fits in the garage. You've earned it, right?
Here's the thing: your lender doesn't care how excited you are. Between the day you go under contract and the day you get the keys, your financial picture is under a microscope. And a single major purchase can derail your entire closing.
This isn't me being overly cautious. I've seen it happen. Let me explain why, and what the rules are.
Your Loan Approval Is Not Final Until Closing Day
Many buyers don't realize that getting pre-approved and even receiving a formal loan commitment doesn't mean the deal is done. Lenders run a final credit check right before closing, sometimes within 24 to 48 hours of the scheduled date. They're looking for anything that has changed since they approved you.
When you finance a purchase or open a new line of credit, two things happen immediately: your credit is pulled (which can lower your score) and your debt-to-income ratio changes (which affects how much loan you qualify for). Either of these can push you outside the parameters your loan was approved under.
Lenders are not looking for a reason to deny you. But they are legally required to verify that your financial profile at closing matches the one they approved. When it doesn't, they have to act.
What Not to Buy (or Do) Before Closing
Here are the purchases and financial moves to avoid from the moment your offer is accepted until after you have the keys in your hand:
- Finance a vehicle. This is the most common one I see. A car payment changes your debt-to-income ratio immediately, and a new credit inquiry can drop your score. Wait until after closing, even if you need the car.
- Open a new credit card or store account. Even zero-interest promotional cards count. Every new account affects your score and your available credit picture. "12 months same as cash" can cost you your loan.
- Finance furniture or appliances. The furniture store wants you to finance that bedroom set on the spot. Your lender does not want you to. Pay cash if you must buy now, or wait.
- Make large cash deposits or transfers without documentation. Lenders must source all deposits over a certain threshold. An unexplained large deposit can hold up or kill a closing just as fast as new debt.
- Change jobs or go self-employed. Lenders want to see stable, verifiable income. A job change mid-transaction, even for better pay, can require a full re-underwrite.
- Co-sign a loan for anyone. Co-signing makes you legally responsible for that debt. It shows up on your credit and affects your ratios immediately.
If It Creates Debt or Touches Your Credit, Wait
The simplest rule I give every buyer I work with: if it creates a new debt, opens a new credit account, significantly reduces your cash reserves, or requires someone to pull your credit, wait until after you close. It doesn't matter how good a deal it is.
You can absolutely plan ahead. Make lists. Shop online. Have the furniture picked out. Just don't pull the trigger on any financing until the title is in your name and your lender has funded the loan.
If you're ever unsure whether a specific purchase is safe, call me or call your lender directly. There's no such thing as a dumb question when a home purchase is on the line. The call takes two minutes. Re-qualifying for a loan after a denial takes months.
The Keys Come First
The period between contract and closing is exciting, and I want it to stay that way. Most closings in Middle Tennessee run 30 to 45 days. That's the window. One month of patience on the big purchases is a small price to pay for the home you worked so hard to get.
Once you close, you can buy every piece of furniture you want. The car can come next week. The store card can wait forever, frankly. But the home cannot wait, and it shouldn't have to because of a couch.
Ready to Buy in Middle Tennessee?
Having the right agent means knowing these rules before they matter, not after. Let's make sure you're set up for a smooth closing from day one.
Information provided for educational purposes only. Individual loan situations vary. Consult with your licensed lender and real estate professional for advice specific to your transaction.
