5 Financial Mistakes to Avoid When Trying to Buy a Home

By Fran Campbell - June 05, 2018

Buying a home is an exciting time! But many first-time home buyers don't realize just how many ways you can mess up a home purchase. You may have got your pre-approval, found a home you loved and made an offer. But if you want to avoid messing up the transaction, you will need to be extremely careful until the sale has closed. The Fran Campbell Team is offering some guidelines to follow to avoid losing your loan approval before closing on the sale.

1. Don't Miss Payments or Pay Late

Many buyers make the mistake of thinking that once the lender issues their loan commitment, they are in the clear and the lender won't check their credit again. This is NOT true! The loan approval isn't final until it's a completely done deal. It's essential that you keep your payments current on all your loan accounts, including credit cards and car loans. The lender will look at your credit again before finalizing your mortgage, and if you have missed any payments, it may lead to you losing the loan.

2. Avoid Changing Jobs

The word stability is something lenders love, so it goes without saying that changing jobs is not something you should do in the middle of purchasing a home! One of the things lenders look closely at is your employment history. They want to be sure that you are financially stable and capable of making your loan payments. By changing a job before you get your loan, you make yourself less appealing to the lender.

3. Refrain from Buying a New Car

Sometimes the feeling of knowing you are finally going to get a home of your own can be so exciting that you start looking at other ways to improve your life – like buying a car. Unfortunately, purchasing a car can throw a wrench into your home buying plans. Your loan pre-approval was based on the state of your credit and your debt load at the time of pre-approval before you bought a car. Adding the debt that the car purchase will bring may make you unable to get the loan for your home.

4. Don't Buy Large Purchases on Credit

Another mistake many home buyers make is using credit to start preparing for their new living arrangements. You may want to start buying furniture and appliances to fill up your new home and make it truly yours, but hold back. Taking on new debt, even for furniture or other household related items, will change the state of your credit and may throw up a flag for the lender that leads to the loss of your loan approval. It's best to just wait until the sale is finalized to begin making these purchases for your new home.

5. Stay Away from Credit Inquiries

While one or two inquiries may not be enough to affect your approvability for a home loan, there is no reason to take unnecessary risks when you are so close to getting your home. Consider this: any time you apply for a credit card, a loan or even try to sign up for a new service, like a cell phone service, the company you are working with will probably make a credit inquiry. They do this to determine if you are a safe risk, much as the mortgage lender does. But when the mortgage company sees that inquiries are being made, and they will when they run their final credit check before finalizing a loan, they may assume you're trying to take out more debt – even if you aren’t. This red flag could lead to the loss of your loan approval.

By following these simple guidelines you'll be well on your way to closing on that dream home in now time! For more helpful tips when buying or selling, contact the Fran Campbell Team today. We're your trusted go-to real estate agents that you can rely on for accurate information and helpful guidance. They will help you work out a realistic idea of the home best suited to your needs, and guide you through the buying process. Contact us today to get started with your home buying search!

Contact the Fran Campbell Team to get your home CLOSED!