What NOT to do when buying a house

Buying a house can be a mix of emotions, especially if its your first time. Here is some suggestions and tips on what NOT to do when you are getting ready to purchase a new home.

  1. Do not change jobs – Job Hoppers Beware!  Lenders like to see a consistent job history which proves to them you’re going to remain employed and able to pay on your mortgage!  If you switch to a new job in the same field, it’s not usually as big of a deal, but at all costs, try and stay where you are until your loan closes.  Always check with your lender!
  2. Do not use your credit cards excessively or allow current accounts to fall behind – if you spend too much money, then how will you afford your payments?  If you don’t make payments on time, how will the bank trust that you’ll repay your mortgage?
  3. Do not go buy a new car – This is a HUGE NO-NO for various reasons.  It can drastically throw off your Debt-to-Income Ratio, and will also show new credit inquiries on your credit report thus lowering your score and POSSIBLY disqualifying you for a great rate and oftentimes disqualifying you for your home loan.
  4. Do not open any new credit accounts – See #2 & #3
  5. Do not switch bank accounts or banking institutions – Lenders are required to source funds for your down payment, your income, and your earnest money.  Changing banks makes their job way harder, and is a HUGE pain in the rear if they cannot verify where your money came from.  This can delay your closing significantly.
  6. Do not spend savings that is designated for your down payment and closing costs.  Period.  No down payment – no house. No closing costs – no closing.
  7. Do not buy furniture on credit – See #2, #3, & #4
  8. Do not make large deposits or cash deposits without first asking your loan officer – See #5 – Cash deposits during a certain timeframe cannot be sourced and are not considered “good funds” that can be utilized as a verifiable down payment.
  9. Do not be a co-signor for someone else – Bad move.  THEIR debt becomes YOUR debt.  This can scare off a bank that is doing your mortgage because WHAT-IF the person you co-sign for fails to pay (worst-case-scenario) …and then you are stuck paying on it so it doesn’t ruin YOUR credit – or – if you choose NOT to pay, they will send you to collections, file judgements against you, and ruin your life.  On the lighter side, being a co-signor will throw off your Debt-to-Income Ratio and show as a liability on your credit that might affect  your credit-worthiness/score.
  10. Do not get married during your loan application without notifying your lender of the impending marital status change and name change ☺  It will life easier on the people working on your loan docs if they know ahead of time!

Keeley Wagner is a licensed Realtor with The Connors Group at Windermere Group One and a former Licensed Closing Agent.  Check out http://www.aprilconnors.com for more information.

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