Worst Things to Do Before Buying

The 5 Worst Things You Can Do Before Buying a Home

1. Go Credit Crazy- It is almost a cliché statement in the mortgage industry; but it is still worth repeating; do not go buy a truckload of furniture until after your loan closes. Avoid obtaining credit for any major expense like a car, boat, or yes even a new bedroom set. Be careful even with the minor expenses. Talk to your loan officer before making any purchases that could directly affect the closing of your transaction.
2. Shuffle Dollars and Cents- As a part of the Pre-approval process, lenders will scour your most recent bank statements. After that they do not just forget about you. They will take another look at bank records and assets in the underwriting process. You will have to explain any deposits or withdrawals.
3. Get Behind on Your Bills- Have a late payment hit your credit report before closing and it can devastate your deal. Payment history comprises about a third of your credit score. One late 30 day late payment can clip your credit score 60-110 points. That will make a major difference if your credit score is on the fence. Many lenders will require at least 12 consecutive months of on-time payments in order to qualify for a home loan. 
4. Co-Sign on a Loan- Co-signing a loan is arguably a bad financial move whenever you make it. But it is especially risky during the mortgage lending process. It means that you are financially liable for someone else’s debt. Lenders will still need to factor in the new monthly obligation into your overall affordability profile. 
5. Change Employment- Losing your job is going to be a big problem. Even job-hopping can present some major hurdles. Lenders are likely to slam on the brakes if you take in a new job in a different field or if you decide to start your own business. The bottom line is any change to your employment is significant. Keep your loan officer in the loop and ask questions when in doubt.