Buying a home is exciting, but before you get too comfortable picking out paint colors, there are a few things you need to stop doing immediately. Some habits and financial moves can wreck your mortgage approval faster than you can say "dream home." Here’s what to avoid:
Taking on new debt like it’s no big deal
Thinking about financing a new car, opening a store credit card for that "one-time" discount, or booking a vacation on credit? Stop. Lenders check your debt-to-income ratio like a nosy neighbor, and new debt makes you look riskier. Wait until after you close to go on a spending spree.
Mysteriously dumping large sums of cash into your account
If you suddenly deposit $10,000 in cash, your lender is going to ask questions. Large, unexplained deposits make lenders nervous, so unless you can document exactly where the money came from, keep things simple.
Job-hopping for a “better opportunity”
Getting a higher-paying job sounds great, but switching jobs right before applying for a mortgage can throw everything off. Lenders like stability. If you must make a career move, make sure you can prove your new income is steady and reliable.
Ignoring your credit score like it’s not important
Your credit score determines your loan approval and interest rate. Maxing out your credit cards or missing a payment right before closing is like tripping at the finish line. Check your score regularly and keep everything paid on time.
Spending your savings on “other priorities”
That down payment? You still need it. Closing costs? Also need those. Moving expenses? Add that to the list. Don’t empty your savings on last-minute shopping sprees or impulse buys. Keep that cash where it belongs.
Co-signing loans for your cousin who has “bad credit”
Your heart is in the right place, but lenders don’t care. If you co-sign a loan, you’re on the hook for that debt, and it will count against you when applying for a mortgage. Tell your cousin they’re on their own (for now).
Ignoring your pre-approval like it’s just a suggestion
A pre-approval isn’t Monopoly money. If a lender tells you $500,000, don’t go house hunting for $600,000 and hope for the best. Stick to your budget to avoid heartbreak and financing nightmares.
Buying a home is a big deal, and the best thing you can do is keep your finances rock solid until you close. Avoid these mistakes, and you’ll make the process much easier.
Then you can go wild decorating your new place however you want.
