10 Things NOT To Do When Purchasing a Home

There are dozens of lists of things that you should do when purchasing a home, but here is the best list of what NOT to do when you are in the home buying process.

1. Do not look for a home without being preapproved. (This is like shopping for a car without a driver’s license. You need to know what you qualify for before going out looking.)

2. Do not suddenly pay off debts or collections or close accounts. (It can actually hurt you if you close certain accounts, for example, most lenders wil want you to have 3 open credit lines that show a minimum of 24 months history.)

3. Do not apply for new credit cards. (New inquiries may affect your credit rating, plus opening new credit will change your debt-to-income ratios.)

4. Do not change jobs or change your pay structure at current job. (With increasingly tougher underwriting guidelines for mortgages, you may have trouble qualifying if you change lines of work or go from a W2 position to commission, etc)

5. Do not consolidate bills (Consolidation can affect your monthly payment amounts, closing accounts to consolidate may cost you good credit lines with positive history)

6. Do not make non-payroll related deposits into your bank account without keeping copies of checks being deposited. (Mortgage underwriters want to see where the money is coming from. They will want to know that any extra money is not a result of a new loan that will change your monthly obligations)

7. Do not pack the documents needed during the loan and home buying process. These include W-2 forms, tax returns, bank statements, pay stubs, etc. (You will need to provide original documentation at time of pre-approval, but will need to provide updated documentation as the loan progresses toward closing)

8. Do not choose a mortgage without researching all the different options. (MANY first time home-buyers are not aware of all the program options available such as Dakota County Bond or Minnesota Housing programs)

9. Do not shop for, lease or purchase a car or other type of vehicle. (This will increase your monthly obligations and will reduce the amount of mortgage you qualify for)

10. Do not incur more debt by making large purchases such as appliances. (Any large purchases will increase your minimum monthly payments and lower what you can afford in a monthly mortgage payment)

By following the advice of MN Home Loan Partners, you will be on your way to obtaining the best terms and interest rates possible – as well as a smooth, on-time closing. If you must take one of these actions listed above, it is wise to discuss this with your loan officer.

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