Important Things to Avoid Before Buying a Home
Buying a home is exciting, but the time between getting pre-approved and closing is extremely important. Even small financial changes can affect your mortgage approval, your loan terms, or your ability to close on time.
If you are planning to buy a home in Evansville or anywhere in Southwest Indiana, here are some important things to avoid before closing.
Don’t Move Money Around Without Talking to Your Lender
Before buying a home, your lender will review your bank statements, income, assets, debts, and source of funds for your down payment and closing costs.
Large deposits, withdrawals, transfers between accounts, or unexplained movement of money can create extra documentation requirements. Even if you are simply trying to organize your finances, moving money around can make the loan approval process more complicated.
Before transferring funds, changing banks, depositing large checks, or moving money from savings, retirement, or investment accounts, talk to your loan officer first.
Don’t Make Major Purchases
This is one of the biggest mistakes buyers make before closing.
Avoid buying a car, furniture, appliances, electronics, jewelry, vacations, or anything else that creates new debt or significantly lowers your available cash.
New debt can affect your debt-to-income ratio, credit score, and loan approval. Even if you have already been pre-approved, your lender may re-check your credit and finances before closing.
The safest rule is simple: wait until after closing to make major purchases.
Don’t Open New Credit Accounts
Before buying a home, avoid opening new credit cards, store accounts, personal loans, auto loans, or financing plans.
Even a “same as cash” furniture offer or a small retail credit card can affect your credit profile. New accounts may lower your credit score, increase your monthly obligations, or raise questions during underwriting.
If you are not sure whether something could affect your mortgage approval, ask your lender before applying.
Don’t Change Jobs Without Guidance
Changing jobs before buying a home can affect your mortgage approval, depending on your income type and job situation.
For salaried buyers staying in the same field, a job change may not create a major issue. But for buyers who earn commissions, bonuses, overtime, part-time income, or self-employment income, changing jobs can make income harder for a lender to verify.
Mortgage lenders usually want stable, documented income. If your income changes, your approval may need to be reviewed again.
Before accepting a new job, switching industries, becoming self-employed, or changing your pay structure, speak with your lender first.
Don’t Co-Sign for Someone Else
Co-signing a loan may seem harmless, especially if the other person plans to make the payments. But from a lender’s perspective, you may still be responsible for that debt.
That added debt can impact your mortgage approval and your ability to qualify for the home you want.
Until your home purchase is complete, avoid co-signing for cars, student loans, personal loans, credit cards, or other financial obligations.
Don’t Miss Payments
Your payment history matters.
Missing a credit card, auto loan, student loan, or other payment before closing can damage your credit and create problems with your mortgage approval.
Stay current on all bills, keep your financial activity steady, and avoid anything that could raise red flags with your lender.
Don’t Make Big Financial Changes Before Closing
The best thing you can do before closing is keep your financial situation as stable as possible.
That means avoiding major purchases, new debt, job changes, large money transfers, new credit accounts, and unexplained deposits.
If something comes up, do not guess. Call your lender or your real estate agent before making the move.
Buying a Home in Evansville or Southwest Indiana?
The Crick Team helps buyers throughout Evansville, Newburgh, Boonville, and the surrounding Southwest Indiana area navigate the home buying process with confidence.
From getting pre-approved to writing an offer and preparing for closing, our goal is to help you avoid surprises and make smart decisions every step of the way.
Ready to Start Your Home Search?
If you are thinking about buying a home in Evansville or Southwest Indiana, contact The Crick Team today. We would be happy to help you understand the process and find the right home for your next move.
