It's understandable; you’re excited; you've found the right home, negotiated a contract, made a loan application and inspections. Closing is not that far away, and you are making plans to move and put personal touches on your new home.
Even if you have an initial approval on your mortgage, little things can derail the process which isn't over until the papers are signed at settlement and funds distributed to the seller. The verifications are usually done again just prior to the closing to determine if there have been any material changes to the borrower's credit or income that might disqualify them.
Most lending and real estate professionals recommend NOT to:
Make any new major purchases that could affect your debt-to-income ratio
Buy things for your new home until after you close
Apply, co-sign or add any new credit
Close or consolidate credit card accounts without advice from your lender
Quit your job or change jobs
Talk to the seller without your agent
The lender and I are working together to get you into your new home. It's understandable to be excited and feel you need to be getting ready for the move.
Planning is fine but don't do anything that would affect your credit or income while you're waiting to sign the final papers at settlement.
Mortgage rates have risen 0.5% in 2018 on 30-year and 15-year fixed rate mortgages and experts expect them to continue to increase. Buyers paying attention to the market understand the relationship that inventory has on pricing; when the supply is low, the price usually goes up. Rising interest rates can affect the cost of homes also.
When interest rates go up, fewer people can afford homes. Lower numbers of buyers can affect the demand, which could cause prices of homes to come down. The question is how much do the interest rates have to go up to affect demand?
As the rates gradually go up, the affect may not be noticeable at all except for the fact that the payments for the buyer have increased.
A ½% change in interest is approximately equal to a 5% change in price. A $300,000 mortgage at 4.5% for a 30-year term will have a $1,520.06 principal and interest payment. If the mortgage rate goes up 0.5%, it would affect the payment the same as if the price had gone up 5%. The difference in payments for the full term of the loan would be $32,547.
There are some things beyond buyers’ control, but indecision isn’t one of them. If they haven’t found the “right” home yet, it is understandable. However, when that home does present itself, the buyer needs to be ready to make a decision. If they are preapproved and have done their due diligence in the market, they should be able to contract before significant changes occur in the mortgage rates.