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What to avoid when buying a home

The average homebuying timeline will vary for everyone, but yours could potentially be delayed if you make certain financial moves.

Sellers, real estate agents and lenders are often very thorough during the homebuying process, and for good reason. Lenders want to make sure your finances are in order so that you can afford a mortgage, while sellers often only want to deal with serious buyers. Even the slightest mishap may raise some red flags.

However, if you make the following mistakes while buying a home, you can expect to run into some difficulties. As such, these are the moves you’ll want to avoid making when buying a home.

Taking On New Debt

In all likelihood, you have some form of debt to your name. Credit cards, student loans and auto loans are just a handful of the common types of debt the average person has. There is nothing wrong with having debt to your name while trying to buy a house.

“You will harm yourself if you take on new forms of debt.”

But you will harm yourself if you take on new forms of debt just before closing on a sale or disclosing debt you hadn’t brought up with the lender beforehand. Both instances are damaging to the point where obtaining a mortgage could be strained.

Throughout the homebuying process, you’ll want to maintain a respectable debt-to-income ratio of around 43 percent or lower, as recommended by the Consumer Financial Protection Bureau. Your debt-to-income ratio is when you add up all of your debts and divide the total by your gross monthly income.

Lenders will look at your finances before funding and closing the mortgage. If they spot that you opened a new credit card or bought a new car with a loan, lenders might think you’re stretching your finances too thin to comfortably afford the payments.

Going to a new job

According to a survey from the Gallup, 21% of millennials — people born between 1981 and 1996 — say they have gotten a new job at some point in the past year, and 60% of millennials are open to changing jobs in the near future. Millennials want more out of their careers and are willing to change jobs frequently to find the perfect fit.

However, there are right and wrong times to switch jobs. The worst time to change jobs is during the homebuying process. If you go to a new company at any point during the loan process, closing a sale will likely become even more difficult.

Lenders will always verify your employment by typically requiring you to provide pay stubs in order to prove the income you previously reported. But by switching jobs, it may take the lender a bit longer than usual to verify your income because it had changed.

Not Paying On Time

Your credit score is a big factor lenders look to in determining whether you can make on-time mortgage payments. If, throughout the homebuying process, you fail to make payments or are late on bills, you may hit a roadblock.

Not only will your credit score decline, but lenders may also feel hesitant to give you a mortgage if they notice unusual payment patterns, especially ones that show you’re consistently late.

Move in photo of boxes in the kitchenAvoiding financial mistakes will help you move in faster.

Not Documenting Money Movement

Lenders need to know everything about your finances, and suspicious deposits will raise some eyebrows. Whenever money is put into your bank account, always keep a paper trail showing where it came from.

Additionally, be sure to provide documentation if you transfer money between accounts. Your best course of action is to always document everything to ensure lenders don’t get the wrong idea about your money.

When buying a home, you’ll have to avoid these common financial mistakes that can derail the homebuying process. Good habits will go a long way toward ensuring you have a smooth experience.



Beginning the home buying journey the very first time can be a bit intimidating, but it doesn’t have to be. Here’s an overview of the home buying process in five steps.

Contact a Bank Midwest mortgage banker to help answer any questions you may have!


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