What NOT to Do Before Buying a Home

Buying a home is an exciting process, but it also requires financial stability and careful planning. Many buyers are surprised to learn that small financial decisions made during the process can delay or even prevent loan approval.

Understanding what to avoid is just as important as knowing what to do.

Do Not Open New Credit Accounts

It may be tempting to open a new credit card or finance furniture for your future home, but doing so can lower your credit score, increase your monthly debt, and change your debt-to-income ratio. Even a small change can affect your approval. Wait until after closing before taking on any new credit.

Do Not Make Large Purchases

Avoid large purchases such as a car, appliances, or expensive items during the homebuying process. Large purchases can increase your debt, reduce your available funds, and impact your ability to qualify. Lenders will often re-check your credit before closing, and new debt could change your approval status.

Do Not Miss or Be Late on Payments

A single late payment can lower your credit score, raise concerns during underwriting, and potentially delay your loan. Continue making all payments on time throughout the process.

Do Not Change Jobs Without Discussing It First

Changing jobs or income structure during the loan process can create complications — especially switching from hourly to commission, becoming self-employed, or changing employers. If you are considering a job change, speak with your loan officer first.

Do Not Make Large Deposits Without Documentation

Lenders are required to verify the source of your funds. Large or unusual deposits may need to be explained and documented. Always consult with your loan officer before moving large amounts of money.

Do Not Close Existing Credit Accounts

Closing credit accounts can reduce your available credit, increase your credit utilization, and lower your overall score. Keeping accounts open and in good standing is typically the better approach.

Do Not Spend Your Savings

Maintain sufficient funds for your down payment, closing costs, and reserves. Avoid draining your savings or making large withdrawals from funds set aside for closing.

Let's Keep Your Loan on Track

Before making any financial decisions, reach out so we can review how it may impact your approval. I am here to guide you every step of the way.

FAQ

Can I buy a car while under contract on a home? It is strongly recommended that you wait until after closing. A new car loan increases your debt and can change your debt-to-income ratio enough to affect your approval.

What counts as a large deposit? Generally, any deposit that is not clearly from your paycheck or a known regular source may need documentation. Your lender will guide you on what needs to be explained.

What if I have to change jobs during the process? Contact your loan officer immediately. Some job changes are manageable — others can delay the process. Communication is key.