Sometimes it can feel like your home buying To-Do list is never-ending. There are papers to sign, meetings to attend, boxes to pack, and decisions to make. As you begin to organize all of the things you need to do, don’t forget to consider the five things you should definitely NOT be doing during the home buying process.
Start or Quit a Job
Many times, a new house means a new start. Maybe you’ve started your own business and want to upgrade to a bigger house with a home office. Maybe you’re changing jobs and need to be closer to the office. Your job often plays a major role in the home you buy, but it’s important not to quit your job while you’re trying to apply for a mortgage. This can make it difficult to analyze your income and expenses and can make it difficult to qualify for a mortgage. Avoid doing anything that makes it hard for lenders to determine if you’re in the right financial space to buy a home.
Apply for a New Credit Card or Loan
A new house means a new place to furnish! It can be tempting to open up a new line of credit to pay for all of the cool new furniture you want for your new space, but now is not the time. Taking out a loan or opening up a new credit card could negatively impact your credit score, and you don’t want anyone messing with your credit score when you’re trying to buy a new house. If at all possible, put off the lending until the sale of the house is final.
Make Any Large Purchases
A house is a big purchase. A very big purchase, and to do it successfully you must be very careful about your expenses. You don’t want to do anything that will even remotely resemble a red flag when it comes to your finances, and a big chunk of money leaving your bank account could look like a major red flag. Whether you’re planning on buying new furniture for the house, a new car for the new commute, or hosting an epic housewarming party, save the big-spending for after closing.
Miss Loan Payments
While we’re sure you’re diligent about paying your debts down and never missing a payment, it’s critical that you are intentional about paying on time while in the middle of the home buying process. Missing loan payments can negatively impact your credit score, and give lenders a reason to question whether or not you’re qualified to borrow money from them. This applies to your other expenses as well, including your utility bills and your car payment. When you’re in the middle of the home buying process, you want to avoid doing anything that will lower your credit score or make you ineligible to qualify for a loan. Pro tip: Just lay low.
Fall Into Analysis Paralysis
This one is more like a friendly reminder. Homebuyers, especially first-time homeowners, often look for obstacles instead of opportunities when buying a home. It can be easy to fall into a mindset of waiting for the perfect property, and in the process, you can miss out on the perfect property right in front of you. Do enough research to help you make confident and informed decisions, and go into the home buying process with a clear budget and a defined list of wants vs. needs. Don’t wait for the stars to align, for everything to be perfect, or for a seller to meet all of your demands. Don’t get so overwhelmed with the home buying process that you don’t take the first step. A professional Realtor can help you when you feel stuck. (And have we mentioned we know a few really good ones?)
Remember, buying a house should be an exciting adventure that symbolizes the start of a new chapter. Understanding the basic Dos and Don’ts will make it a smooth process and help you make confident decisions.
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I planned to open a home loan this week, but it might hurt my credit score. I’m also concerned about the risks of opening up a new credit card. The only thing that I’m worried about is the miss in loan payments, and I might have to get a lender’s quote for it.
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I like your real estate tips. I want to buy a house. I’ll need an agent.
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Great to know the things I needed to avoid before buying a home. It’s definitely understandable to not quit or start a job to ensure a steady amount of income. Overall, learned a lot from this article. Thanks.
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I’m glad that you mentioned that a new house means a new place to furnish! It can be tempting to open up a new line of credit to pay for all of the cool new furniture you want for your new space but now is not the time. My wife and I are looking to buy a new house so reading this has helped a lot. We have never purchased a house before, so knowing that finding the best agent will help us buy the best home out there.
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I loved it when you said that while we’re sure you’re diligent about paying your debts down and never missing a payment, it’s critical that you are intentional about paying on time while in the middle of the home buying process. We are planning to move to a new house before the end of the year. We are looking for the best real estate agency in town. We will also ask referrals from friends.
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I liked how this post emphasized the importance of not quitting employment while applying for a mortgage. We want to buy a home but we are not familiar with the steps. I think we should work with a real estate agent on looking for our dream home.
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I appreciate what you said about not making large purchases before getting a new house. That makes sense considering you need the dimensions of the new house. I’ll have to hire a realtor to find a house that is big enough for me.
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It got me when you said that we have to wait until after the real estate closing to buy big pieces of furniture or even a new car when getting a new house. I will keep that in mind so that I don’t get into debt when I already have saved enough money to get my own place. This has been the reason why I have been saving up for the past three years, and I want to make sure that I am making the right decisions to keep me from getting short on budget.
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I like what you said about making sure you never miss the payment. My wife and I need a loan for our new house. We’ll have to make sure that we pay our payments on time.