Things Not To Do Before Buying A Home

Taking out Credit and Making Purchases

Do not make any major purchases or any new credit of any kind including furniture, jewelry, store cards, car, line of credit etc. Not only could this effect your credit scores but it could also impact how much of your income can go into your housing payment for mortgage purposes. Banks look at your debt compared to your income which they make into a ratio. If you make a large purchase that increases your debt and your income stays the same that is less money that can go towards your mortgage payment which decreases your purchase power.  Every time you have an impulse to buy something think about how that will affect your ability to buy a home.  If a large purchase is absolutely necessary talk to your loan officer before you do anything.

Bank Deposits

Making large deposits that’s not from your paycheck could cause some serious problems when applying for a mortgage. Banks will usually require two months bank statements, retirement statements, money market accounts and any other accounts you have. If the bank sees a large deposit they will require more information on it. Banks are concerned about sourcing the money used for down payment and closing costs and they may require cancelled checks, donors bank statements, explanation letters, etc on any deposits you make. It is often tedious and stressful for the purchaser and is often just easier to not make those deposits especially cash deposits without speaking to your loan officer first. In some cases it could prevent you from getting approved for a mortgage.