10 Financial Mistakes to Avoid Before Closing on a Home

Purchasing a home is an exciting milestone, but it also requires careful financial management to ensure your loan approval and closing process go smoothly. As real estate professionals with The Houk Group, we’ve seen firsthand how certain financial decisions during the home buying process can impact your ability to secure your dream home. Here are ten crucial things to avoid once you’ve started the journey toward homeownership:

1. Do Not Change Jobs, Become Self-Employed, or Quit Your Job  
Lenders want to see stable employment history. Changing your job status can raise red flags and potentially delay or derail your loan approval.

2. Do Not Buy a Car, Truck, or Any Vehicle  
Taking on new debt can affect your debt-to-income ratio, which lenders scrutinize closely. Hold off on major purchases until after closing.

3. Do Not Excessively Use Credit Cards, Cancel Cards, or Fall Behind on Payments  
Maintaining good credit habits is essential. Avoid large credit card balances, don’t close credit accounts, and always pay on time.

4. Do Not Spend Money You Have Set Aside for Closing  
Closing costs and down payments are non-negotiable. Keep these funds untouched and readily available.

5. Do Not Leave Out Debt or Liabilities from Your Loan Application  
Honesty is critical. Omitting debts can lead to loan denial or legal issues down the line.

6. Do Not Buy Furniture on Credit  
Similar to vehicle purchases, new credit lines can impact your financial profile negatively during underwriting.

7. Do Not Make Large Deposits or Withdrawals Without Checking with Your Loan Officer  
Unexplained financial activity can cause confusion or require additional documentation, slowing the process.

8. Do Not Originate Any Inquiries Into Your Credit  
Each credit inquiry can lower your score slightly. Avoid applying for new credit cards or loans.

9. Do Not Change Bank Accounts  
Lenders verify your financial history. Switching accounts can complicate verification and delay approval.

10. Do Not Co-Sign a Loan for Anyone  
Co-signing increases your liabilities and can affect your debt-to-income ratio, potentially jeopardizing your mortgage approval.

By following these guidelines, you’ll help ensure a smooth and confident path to homeownership. If you have any questions or need personalized advice, feel free to reach out to The Houk Group. Together, we can make your home buying experience a positive and successful one!

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The Houk Group  
Phone: 225-234-0022  
Email: admin@timhouk.com