Things You Should Absolutely Avoid Before Buying a Home

Things You Should Absolutely Avoid Before Buying a Home

Buying a home is one of the most important financial decisions you’ll make in your life. While it’s exciting to start envisioning your new space, there are several things you should avoid before you finalize the purchase. These mistakes can affect your mortgage approval, finances, and even the entire home-buying process.

1. Avoid Large Purchases

Once you start the mortgage application process, avoid making any significant purchases—especially on credit. This includes buying a new car, furniture, or appliances. Lenders look at your debt-to-income (DTI) ratio, and a large purchase can raise red flags. A sudden increase in debt can negatively affect your credit score and mortgage approval.

Action Tip: Wait until after the loan closes before making any large financial decisions.

2. Don’t Change Jobs

Stability in your employment is a critical factor lenders use when determining loan eligibility. Switching jobs or even taking time off during the home-buying process may cause delays or complications. Lenders want to see consistent income to trust that you can pay back the loan.

Action Tip: If possible, delay any career changes until after you’ve closed on the home.

3. Avoid Applying for New Credit Cards or Loans

Any new credit inquiries can potentially hurt your credit score, which can raise your interest rates or disqualify you from a loan. Lenders will conduct a final credit check before approving your loan, so any recent credit inquiries can jeopardize your approval.

Action Tip: Resist the urge to apply for new credit, even for home-related items like furniture or electronics, until after you’ve secured the mortgage.

4. Don’t Ignore Additional Costs

Many first-time buyers focus solely on the down payment but overlook other costs like closing fees, home inspections, property taxes, and moving expenses. Not budgeting for these can lead to last-minute stress.

Action Tip: Make sure to account for all potential costs and leave some cushion for unexpected expenses.

5. Don’t Drain Your Savings

The down payment isn’t the only reason you need cash on hand. Lenders also want to see that you have financial reserves to cover mortgage payments in case of emergencies. Draining your savings can weaken your financial profile and put your mortgage approval at risk.

Action Tip: Maintain a healthy savings balance even after covering your down payment and closing costs.

6. Avoid Skipping the Home Inspection

Some buyers skip the home inspection to speed up the process or lower upfront costs. However, this can be a huge mistake. A thorough inspection can reveal hidden issues with the home, potentially saving you thousands in future repairs.

Action Tip: Always invest in a professional home inspection to avoid costly surprises later.

7. Don’t Make Sudden Bank Transfers

Large, unexplained transfers or deposits into your bank account can create suspicion with lenders. They may delay your loan approval as they investigate where the money came from, which can stall the closing process.

Action Tip: Keep your financial transactions stable and transparent, and be ready to explain any significant changes.

Buying a home is a complex and exciting journey, but these common missteps can throw a wrench in the process. By staying informed and cautious, you can avoid unnecessary delays and secure your dream home with confidence.