Title: Navigating Home Buying: What NOT to Do

Introduction:

When embarking on the journey of home buying, excitement often takes center stage. However, amidst the anticipation of decorating and settling into a new space, it's crucial to be mindful of certain actions that can impact the smooth progress of your home loan. In this guide, we'll explore what not to do when buying a home, shedding light on aspects that are sometimes overlooked.

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1. Don't Deposit Large Sums of Cash:

The ease of traceability is vital for lenders when it comes to your funds. Before making any cash deposits, consult your loan officer to ensure proper documentation of transactions. Typically any deposits that surpass 50% of your monthly income can raise a red flag.

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2. Don't Make Any Large Purchases (Using Credit):

Beyond home-related expenses, any significant purchase can raise red flags for lenders. Higher debt-to-income ratios resulting from new debt may jeopardize your mortgage eligibility. Resist the urge to make substantial purchases during this crucial period. Trust me it can wait. Any large purchases you want to make should wait until after you buy your new home. At this point you have less to worry about since your loan is given to you based on debt to income before you purchase your home not after.

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3. Don't Co-Sign Loans for Anyone:

Co-signing comes with accountability. It impacts your debt-to-income ratio and can affect your loan eligibility. Unless you have a solid payment history as a joint applicant, avoid co-signing loans for anyone especially during your home buying journey.

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4. Don't Change Bank Accounts:

Consistency in your accounts simplifies the task of sourcing and tracking your assets for lenders. Consult your loan officer before making any bank account changes. The next best thing is to isolate one account you would like to use for your home purchase by segregating your down payment and closing costs into one account you have less to explain especially if you often deposit and withdrawal large sums of money. Nearly all lenders only need (2) months worth of bank statements and banking history anything beyond that is irrelevant for underwriting purposes.

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5. Don't Apply for New Credit:

Whether it's a credit card or a new car, new credit applications impact your FICO® score. Lower credit scores can influence your interest rate and approval eligibility. Exercise caution with any new credit applications. Simply put, hold off and dont even think about it.

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6. Don't Close Any Accounts:

Contrary to common belief, having less available credit doesn't necessarily make you less risky. Closing accounts negatively affects your credit history and usage percentage. Maintain the consistency of your credit accounts, unless suggested otherwise by your loan originator. In some cases loan originators can use intelligent software to optimize your credit. Sometimes this does involve closing an account or removing yourself from a join account. But dont do this without any professional guidance.

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Conclusion and Call to Action (CTA):

Your home buying journey deserves careful consideration to ensure a smooth process. Before major financial decisions, always consult your mortgage originator for guidance. This guide is just a glimpse into the intricate world of home buying.

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Note From The Author:

Thank you for reading this post. I wrote this with love and the sincere intention to empower you on your path to homeownership. Share your experiences with me or any comments below and let's continue guiding others towards accomplishing the dream of #homeownership

Connect with me through email at mike@mike-duran.com