3 Costly Mistakes to Avoid When Buying a Home

While getting your dream home under contract can be a good thing since it brings you a step closer to finally calling it your own, you need to take things easy to avoid getting yourself into trouble. Keep in mind that securing a mortgage pre-approval and getting under contract doesn't guarantee that your lender will fund your home loan.

Since a lot of things can happen until closing day, you need to carefully tread your path to avoid making some costly mistakes that you may regret later. How do you do it? Here are 3 simple tips that you may want to consider.

Avoid indiscriminate spending

Clearly, you may be thrilled on the idea of finally living in your dream home but that doesn't mean that you have to go shopping for new furniture before your loan closes. Keep in mind that any new payments will negatively affect your monthly debt-to-income ratio, and hard inquiries on your credit report will lower your credit score.

Pay your bills on time

Since payment history contributes about a third of your credit score, any late payments in your credit report may ruin the deal. While this may seem insignificant for those who have an 800 score, it may be enough for some lenders to reject your loan.

Don't co-sign a loan

Co-signing a loan during the mortgage lending process is not a good idea since it means that you will be financially liable for someone else's loan. This could also affect your assets and debt-to-income ratio.

Remember, getting under contract does not serve as a guarantee that you can get the money you need to buy your dream home so avoid making any of these costly mistakes before closing on your home loan.

For more valuable tips on selling or buying a home, please visit my site at http://www.pamsantoro.bhhsgeorgia.com/. You can also contact me at 678-656-6627 if you have any questions about local market conditions, financing or anything that can help you with in your search for real estate.

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