If you’re in the process of purchasing a home or you’re interested in purchasing a home I’m sure people have given you some advice on what to do.  What about the not to do’s?  In this article Don’t Do This When Buying a Home we’ll go over the items not to do to ensure you make the right decisions on your home buying journey.  Reading this article will assist you with the knowledge you need to ensure you put your best foot forward with your lender.

First off, when you’re buying a home make sure to keep your FICO credit scores in check.  This means avoid buying anything on credit, i.e. purchases on credit cards, automobiles, personal loans, etc.  The available balance of your credit cards can directly impact your credit scores thus putting your ability to purchase or obtain a home loan in jeopardy.  Additionally, lenders use your debt to income ratio (DTI) to measure your ability to repay the the loan so if your DTI exceeds a certain percentage of your income you will not be approved unless you raise your income or lower your debt.

Another item you want to be aware of is not to move money around.  In addition to a reasonable DTI level, lenders will want to see “Seasoned Funds” in a bank account.  Seasoned funds are monies in an account with a certain balance for a certain amount of time.  Typically you’ll want to leave as much money in an account as possible for at least 60 days.  This will show the lender your ability to show financial responsibility and the money necessary to fund the down payment and other necessary items for home ownership as per the lender.

In the event that you do have large amounts of monies moving from account to account then be prepared to write detailed explanations to the lender to advise them of why these transfers occurred.  This process can be a pain in the you know what so the best course of action is to avoid moving money around.  Don’t get frustrated with your lender if they ask you to prove certain items as they’re only trying to help you in building your case so when it’s presented to the underwriter for approval it will go through and be approved without any snags.

Hopefully this article Don’t Do This When Buying a Home helped you understand what items to avoid when buying a home.  If you have any additional questions about this article, please feel free to contact us or leave a comment below.