After spending months preparing to start your home-buying journey, the last thing you want to do is set yourself back by making a mistake. Some mistakes can be fixed pretty quickly, but others can take time to repair. These are the top 3 mistakes to watch out for when buying a home.
Mistake 1: Applying or co-signing on a new loan. Whenever you open a new loan, you’ll have a hard pull on your credit report and lower the average age of your financial accounts. These two things play a part in your credit score, which is why agents and lenders will always caution you about opening a new loan or credit card when you’re buying a home.
But did you know that co-signing on a loan or credit card can have just the same effect? Co-signed loans still pull from your credit and go on your credit report. This will lower your average account age and your credit score, which you want to avoid at all costs. If this happens, it will take a while for your credit score to rise again. Avoid opening any new lines of credit when you’re looking to buy a house.
Mistake 2: Being late on a credit or loan payment. This is another easy mistake to make that can wreak havoc on your credit score. Being late on a payment will drop your credit score, especially if it’s not your first offense.
When you’re preparing to buy a home, pay extra attention to your loan and credit card payments. Set whatever reminders you need to set to make sure that you don’t miss a payment!
Mistake 3: Quitting or changing your job. Lenders pay close attention to your employees when they’re seeing if you qualify for a mortgage. Any big changes in your employment right before buying a home or during the closing process will signal a big red flag to your lender.
If you can wait to make a change to your employment situation until after you close on your mortgage, you should. If you do have to make a big change, it might set your timeline back a bit as your lender may want to ensure that your financial situation is stable.
These mistakes may seem small, but they can have a huge impact on your home-buying timeline. If you make one of these mistakes, your credit score and employment history will take time to build back. It’s not the end of the world, and you’ll always be able to rebuild your credit and employment history, but it’s always easier to not need to do so in the first place!
Want to know what other mistakes you’ll want to avoid when buying a home? Just reply to this email!