Don't Do These Things Before Buying a Home!

by Mary Ann Romans | More from this Blogger

25 Jul 2008 12:43 PM

If you are planning on a home purchase, there are certain things that you can do that might jeopardize your success in getting a qualifying mortgage or a good rate. As soon as you decide to house hunt, don't do any of the following.

Make a major purchase. You don't want to affect your assets by making a major purchase. This could affect you in two way. First, it can add to your debt, which will affect your credit rating. And second, it can reduce your available assets, also affecting your credit or affecting the cash you might have for a down payment. A major purchase could be anything from a car to furniture to a television.

Move any of your assets around. A mortgage company takes a look at the money you have for your down payment. They want to make sure that you are not borrowing money privately for the down payment, nor have any debts that you may be paying back privately. If you start to move your money around, you'll be required to produce a paper trail that shows that any large withdrawals or deposits are accounted for. At the best, this process is tedious. At the worst, you lose some of the paperwork and can't get your mortgage.

Change jobs. While a new job may make paying for that mortgage a lot easier, it is best to have some time between getting a new job and applying for a loan. For one thing, many companies have a trial period of three months or more with new employees, and your mortgage company may see you as a risk. Also, you are usually required to provide at least two or three months worth of your pay stubs. This may cause unnecessary delays with your mortgage during which your mortgage interest rate could rise.

Mary Ann Romans writes about everything related to saving money in the Frugal Blog, technology in the Computing Blog, and creating a home in the Home Blog. Starting June 1st, don't miss her articles in the Baby Blog. You can read more of her articles by clicking here.

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Learn more about Mary Ann Romans

Mary Ann Romans is a freelance writer, wife and mother of three children. She lives in Pennsylvania with her husband, the kids and a 16-pound cat.

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