What NOT to do before buying a house...
I recently had some newly wed home-buyers who were excited about buying their first home. They were pre-approved, had great jobs, knew what they wanted to buy and even where! We looked at 18 homes over 4 nights after they got out of work and finally found 'the one.' As we formulated the offer, negotiated over a day and night and got the house under contract, they told me that they were so excited about the furniture they just bought and that it would fit PERFECTLY in their new home.
My jaw dropped.
Now, realize that I give a very informative booklet about the ins and outs of buying a home before I even start working with someone and it does include quiet a stern paragraph about NOT making any purchases, including furniture or cars, etc., because it could impact your ability to get a loan. Well, it turns out they did NOT read that booklet. After running into that purchase, the lender had to scramble to get them another loan, closing was delayed and my Buyers lost a little leverage with some late in the game negotiating. So, the moral of this story...and the list below...DON'T buy anything big, like a house full of furniture, a car, don't quit your job, and for goodness sake, no new credit cards!
Unless you're buying with cash...then go ahead, buy that sofa!
The BIG NO LIST when buying a house:
Don't apply for a new Credit Card: Remember that when you apply for a new credit card it can be BAD and look poorly on your credit rating. WAIT!
Don't buy a new car: If you would like to live in a new car instead of the dream home, then go ahead and pick on up!
Don't go furnish the home before you own it!: We all know that you already have picked out that new couch, entertainment center and 65" 4K HDR flat screen. Avoid buying them until after you close on your home!
Avoid changing jobs: Although job changes can provide better pay or a chance for advancement, it could delay your quest for home ownership.
Don't close any credit accounts: It makes sense to clean up your finances by canceling unused credit cards and transferring balance to other cards to get a lower interest rate when you're offered them. Don't Do It! This can be a bad move for your credit score.
Don't get behind on payments!: Make sure you stay on top of your credit card and rent payments.
Don't move money without a paper trail. your lender is going to need documentation for all your transactions to make sure you really have enough money.
Don't spend your savings: You're going to need cash for down payment and if you end up paying closing costs.