Before purchasing a home in North Park or anywhere in San Diego, avoid making major financial changes that could jeopardize your mortgage approval. Do not open new credit cards, take out car loans, or make large purchases on credit. These affect your debt-to-income ratio and credit score directly.
We know you probably want to buy that sofa that is perfect for the new home or the bedroom furniture because there is a sale going on. Please “DO NOT” do this. Wait until after closing.
A Story We Will Never Forget
Many years ago, we worked with a young couple buying their very first home in North Park, right near Morley Field. They were so excited, and rightfully so. It is one of the best neighborhoods in San Diego, and this was a big milestone for them.
Throughout the process, we reminded them more than once, “do not buy anything big” during this time. No furniture, no appliances, nothing on credit. Their debt-to-income ratio was already tight, with no room for error.
One day before we were supposed to close escrow, Home Depot ran an appliance sale. The young couple figured they were clear to close because we were literally closing on the home the very next day. They had already mentally moved in. So they pulled out their credit card and bought a full set of new appliances for the home. (Aigh, aigh, aigh)
What happened next was not good. The underwriter ran their credit one final time, which is standard practice, and everything shifted. The numbers no longer worked. We had to delay the closing. The sellers were upset. The buyers were devastated,
facing the very real possibility of losing the home they had worked so hard to get.
Fortunately, their family stepped in and gave them “gift funds” to bring the ratios back into line. We were finally able to close, but it was one of the most stressful weeks of the entire transaction. All of it was completely avoidable.
That story stays with us. We share it with every buyer we work with because it is 100% real, and it can happen to anyone.
Do Not Change Jobs
Avoid changing jobs right before or during the mortgage process. Lenders want to see a stable employment history. Even a lateral move to a higher-paying job can raise red flags during underwriting if the timing is wrong.
Do Not Make Large Unexplained Cash Deposits
Lenders will question the source of any large cash deposits that appear in your bank account. Every dollar deposited into your account during this period must be traceable and explainable. Talk to your lender before accepting large transfers or gifts from family.
Do Not Skip the Home Inspection
Skipping the home inspection to save money or speed up the process is one of the biggest mistakes a buyer can make. In North Park, where many homes were built between 1900 and 1940, inspections regularly turn up issues with electrical panels, plumbing, roofs, foundations, and drainage that are not visible to the naked eye. A few hundred dollars for an inspection can save you tens of thousands
after closing.
Do Not Waive Contingencies Without Understanding the Risks
In a competitive market, buyers sometimes waive contingencies to make their offer more attractive. This can work in your favor – but only if you fully understand what you are giving up. Waiving an inspection contingency means you are buying the home as-is. Waiving a financing contingency means you could lose your deposit if your loan falls through. Never waive a contingency without first talking it through with your real estate agent and your lender.
Do Not Drain Your Savings for the Down Payment
Putting every dollar you have into the down payment and arriving at closing with nothing left is a risky position. Homeownership comes with immediate costs: repairs, maintenance, moving expenses, and unexpected issues that show up in the first few months. Keep a reserve. Your future self will thank you.
Do Not Co-Sign Loans for Anyone
Co-signing a loan for a friend or family member during this period adds debt to your profile, even if you are not making the payments. This can affect your debt-to-income ratio and jeopardize your mortgage approval. Wait until after closing.
The Simple Rule
Keep your financial profile as stable and clean as possible from the moment you start the home-buying process until the day you close. Any change, no matter how small it seems, can have real consequences. When in doubt, call your lender before you do anything financial. That one phone call could save your entire transaction.
Ready to Buy in North Park?
The McT Real Estate Group has helped hundreds of buyers navigate the North Park market. We walk you through every step so you know exactly what to do and what not to do before you close.
Start your home search here or contact us directly.
Related:
San Diego Relocation Guide