(Newswire.net — June 11, 2019) —
When you’re buying a home for the first time, you’ll be surprised at how easy it is to mess up a home purchase. You may have already found a home you love, got your pre-approval and made an offer, but you’ll need to very careful until the close of the sale. Here are a few tips on what not to do before buying a house.
What Not to Do Before Buying a House
Don’t know what not to do before buying a house? You shouldn’t miss out on any loan payments, be careful before consolidating your loan and more.
Don’t Miss Loan Payments
Your lender will look at your credit before finalizing your mortgage, so it’s crucial that you don’t miss any payments. Keep your payments current on all car loans and loan accounts including credit cards. Lenders can revoke a mortgage commitment whenever they see fit. This habit should also continue for when you’re financing other large purchases into your mortgage such as a pool and any other additions to the home.
Be Careful Before Consolidating Your Loan
Consolidating your debt can be tempting, especially when you start looking for a home. While it makes sense for some people, there may be hidden interest rates and fees that can increase your overall costs dramatically. There are many cases where debt consolidation may not improve your debt the way you intended, so be sure to read all the fine print.
Avoid Changing Jobs
One of the things lenders look for when vetting borrowers is their employment history. Your lender wants to establish whether you’re financially stable and capable of making your payments on time. As such, the last thing you want to do is change jobs in the middle of purchasing a home, as it makes you less appealing to lenders.
Don’t Start Banking at a New Institution
Your bank may have let you down or maybe you got a better offer from a competing bank. Whichever the case, changing banks before getting a loan can disrupt everything. Your status and banking history, just like your job and finances are part of what contributed to you getting pre-approved. Changing banks, therefore, may prevent you from getting final approval.
Avoid Buying A Car
Many people make the mistake of buying a car while also purchasing a home. While there’s nothing inherently wrong with that, adding the debt of a car may lower your chances of getting a loan for your home. Consider buying a car after your mortgage has been approved.
Don’t Buy Household Goods and Furniture on Credit
Another common mistake many homebuyers make is purchasing furniture and other goods on credit. However, taking on new debt will change the state of your credit and may result in you losing your loan approval.
Avoid Making Large Deposits into Your Bank Account
Making sudden large deposits into your bank account will make lenders uneasy. Whenever you start doing anything unusual with your bank account, chances are your lender will begin to scrutinize the loan and eventually back out.
Bottom Line
It’s easy to make mistakes but knowing what not to do before buying a home will increase your chances of getting a loan approval. Be honest with potential lenders and do your due diligence when comparing lenders. It’s also crucial that you don’t spend more than the value of your home, so you should prepare and plan out all of your expenses prior to homeownership and you can then start packing!