Things to Avoid: What Not To Do Before Buying a House

You’ve been approved for a mortgage on your next home in the West Texas area and may already be dreaming about new furniture, landscaping, interior designs, and so on. You’re excited, and with good reason – but don’t relax just yet.

An important thing to remember at this stage is to remain practical. Remember, your loan hasn’t closed yet and your lender will recheck your credit – and other details – to make sure nothing has changed. That said, here are some things to avoid when buying a house.

Going On a Credit Binge

An old cliché says that you should never buy a whole bunch of new furniture before your loan closes. Also, refrain from making any major credit purchases or buying a car or boat. It’s wise even to be careful with minor credit card purchases, considering the bigger picture of how those payments will add up.

Changing Banks

Changing banks just creates more paperwork for you and the lender. Stay with your current bank until the mortgage is complete. The same can be said for moving money around between accounts –  that means you’ll have deposits in some accounts and withdrawals for others and your lender will request documentation for all of these. The bottom line: don’t raise too many red flags.

Getting Behind on Bills

A late payment that hits your credit report before closing can sink your deal. Remember, your payment history comprises about a third of your credit score, and even one 30-day late payment can take points off of yours.

Co-Signing on a Loan

Co-signing on a loan can be a bad financial move in most cases and one you’d be better off not making during the mortgage process. Doing so makes you liable for someone else’s debt. Even if that person is financially responsible, lenders will add your new monthly obligation into your financial profile. One more debt could unnecessarily cloud your credit picture.

Changing Your Employment Status

Changing jobs during the final approval process can raise red flags; losing your job will cause real problems. Lenders like to see reliable income that’s likely going to continue for the long term. Even taking a new job in a different field can make lenders put the brakes on your deal, as would seeing your income shift to a commission basis.

Don’t Dip Heavily Into Your Savings

When it comes to what not to do before buying a house, spending your cash reserves also belongs on the list. You’ll need money for the down payment and to cover closing costs, so don’t be tempted to use that chunk of change on something else. Your lender may verify your savings one last time before approving your loan. On the same note, don’t make large deposits into your bank account before you’ve closed – that can be an additional red flag to a lender.

Our Home Loan Center team of Renessa, Cody, and Lacie are not only “People That You Know” but they also have the experience and expertise to help guide you through the mortgage process. Contact us today to make the home buying process easier for you and your family.