The homebuying process can be complicated, but it’s compounded when the buyer acts without the proper knowledge of what they’re doing. They may seem like common sense to avoid, but believe it or not, the following 10 mistakes to avoid have actually happened in transactions:
- Financing new purchases after applying for a mortgage. You absolutely do not want to make any other major purchases while you’re in the process of getting a mortgage for a home, including a car, furniture, or the like. This will affect your credit, possibly damaging your chances of getting a mortgage altogether.
- Applying for new credit. Do not apply for any other type of credit during the process, be it for a different loan or a new credit card.
- Racking up credit card debt. Avoid increasing your current debt on your credit card(s) or risk sending up red flags in your mortgage lender’s eyes.
- Changing jobs or reducing your hours. Keep your current job and hours, if at all possible.
- Switching banks or making large transfers. Your down payments will need to be verified at the bank you had when you applied for your home loan; switching banks will derail the process. Large transfers can also be suspicious to lenders.
- Making late credit card, installment, or utility payments. The key to great credit is consistent, timely payments; late payments bring your score on your report down.
- Co-signing on a loan for anyone. Even if that other person is a family member or a loved one, co-signing on a loan while you’re in the mortgage process will affect your ability to get a loan yourself.
- Neglecting to list your debt on your loan application. It will show up on your credit report regardless, so be upfront when you apply for your loan.
- Making large deposits into your bank account. Your lender will need to verify where those funds came from.
- Spending your closing money…before closing. Believe it or not, this happened to a buyer during a transaction. That money needs to be set aside for the purchase of the home and spending it early defeats the purpose and only hurts your ability to buy that home.
If you can avoid these 10 home buying mistakes once your offer is accepted and you begin applying for financing, the entire process should go over smoothly for you.
“Avoid increasing your current debt on your credit card(s) or risk sending up red flags in your mortgage lender’s eyes.”
For any questions about these mistakes or about home financing in general, please feel free to reach out to us. We’d be more than glad to help you out.