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Finding a great home loan involves careful consideration of your needs, finances and history. We are here to guide you.

Things to NOT do Before Buying a House

before buying a house

There is plenty of advice that you can get about what you should do before buying a house. The most common advice is to save money, pay off debts and maintain strong credit. However, how do you know what you should not do before buying a house? The list below helps you to understand everything you want to avoid before buying a house.

1- Do not make any inquiries to your credit.

An inquiry is made on your credit report any time you apply for new credit, or open another account that requires a credit check. This can be a red flag for lenders because they may be concerned that you have another credit line that is not yet reflecting on your credit report. Your lender may require you to provide proof that you do not have any additional debts from those prior inquiries. To avoid any extra documentation just avoid credit inquiries during the home loan process.

2- Do not close out credit accounts.

Closing credit accounts can significantly impact your credit score. It will affect your the amount of available credit that you have and can cause your credit score to drop. If you have paid off a revolving debt, like a credit card, just leave the account open. The available credit line and the positive payment history can help you build a strong credit rating.

3- Do not make large transfers between bank accounts.

All mortgage lenders like to see that the money in your bank account is seasoned. This means that any large deposits that were made have been in the account for two months or longer. If you have a large deposit come into the account they will want to source where that money came from. This means providing extra documentation for your lender.

4- Do not miss any payments.

Late payments will severely drop your credit score or even your chances of being approved for a mortgage. A late payment can increase your interest rate or jeopardize your entire mortgage altogether.

5- Do not increase your debts.

Your mortgage approval is based on a debt to income ratio. It adds up your current monthly obligations and divides them by your income. It is intended to measure your ability to pay your mortgage every month. Do not risk your loan approval by increasing your debt.

6- Do not buy a car with financing.

This goes along with the tip above. Buying a car that is financed will add to your debt to income ratio and can potentially risk your mortgage loan.

7- Do not deplete your savings.

You will need your savings account to stay intact throughout the mortgage loan process. You will need your savings for an earnest money deposit, down payment, closing costs and even cash reserves. Avoid the temptation to spend and save your money for the miscellaneous expenses that come with a mortgage.

Avoid doing the things listed above to make your mortgage loan process easier. While there are certain steps that you want to take before buying a house, there are definitely items that you don’t want to do. Take heed to the list above and your home purchase should be a smooth process.


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Estimated Monthly Payment
$2,385