Home Buying Don’ts
We spend a lot of time telling you what to do when buying a home.
But there are also things you need to know NOT to do – the home buying don’ts. Depending on your circumstances, not all of these may apply, but as a general rule, please:
Don’t make any large purchases
Hold off on choosing that new furniture or ordering a new refrigerator until AFTER you have closed on your home. If you buy on credit, it will increase your debt-to-income ratio and could result in you no longer qualifying for a mortgage. If you pay in cash, it reduces the amount of reserves that your lender thinks you have – this could also mean you no longer qualify for a mortgage.
Don’t apply for any new credit cards
When you are approved for a mortgage, all of your current and potential debt is taken into consideration. Adding to your potential debt can throw your ratios out of whack and send up a red flag to your lender.
Don’t make any large deposits to your accounts
During the loan approval process, you must be able to prove where your money comes from. Plunking that money hidden under your mattress or in a coffee can into your bank account is going to make the mortgage company very, very nervous. If you make a deposit because you have cash stashed away somewhere, your parents decided to make a large gift to you, you get a bonus from your employer….all of these will need to be explained to the lender and it’s usually at the last minute. This can result in a delay in closing. The sooner those funds are in your account (preferably before you apply for a loan), the better.
Don’t quit or change your job
Seems common sense, right? We’ve seen it happen. Don’t do this. Ever.
Do you have questions about the home buying process? We’re here to give you answers. Just call us at (504) 327-5303 and we’ll be happy to help guide you along the way.
