September 22, 2023
Are you a first-time home buyer? The house hunting process is one that is best approached with some planning, and you will find plenty of advice online about what to do ahead of your loan application. But what about what NOT to do?
There are fairly obvious things not to do.
Nobody should apply for a car loan while buying a home, for example. You should not quit your current job, or make major financial changes while trying to convince a lender you are an acceptable risk for a home loan.
But what about the other things to avoid when buying your new home?
Don’t Take The First House You Really Like
Some borrowers get emotional about the first property they find that they could see themselves owning.
If you have seen a lot of houses that just didn’t make you want to buy, the first one that does may come with a bit of extra emotional baggage, so to speak.
Some fall in love with a house and think they seriously want to own it. But some change their minds after finding an even more impressive house.
That isn’t as rare as you might think. New house hunters may experience a variation on this theme, and it is often wise to start shopping for a home informally at first.
Window shop. Don’t plan to purchase. Just get an idea of the different options in your housing market. It is a strategy that may help you make less emotional decisions about buying.
Emotional decision-making, where major investments like buying are concerned, is to be avoided at all costs. Give yourself time to think clearly and realistically about the house you think you might purchase.
Do Not Co-Sign
Co-signing on somebody else’s loan can interfere with home loan approval, especially depending on the size of the obligation and timing.
Are you worried about their ability to qualify for an FHA mortgage loan? Focus on reducing potential debt, not increasing it.
Don’t Make Risky Investments
Don’t start a major investment process like a home loan while heavily leveraged in high-risk financial instruments, cryptocurrency or related ventures.
You do NOT want to experience a major loss of investment funds at the same time you are applying for a home loan to buy or build your house.