When buying a home, avoid these six lousy habits.

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If you plan on buying a home in 2018, there are six lousy habits you need to avoid when doing so.

1. Depending on your credit cards. We all like the “buy now, pay later” attitude toward making purchases because it affords us instant gratification. But having this attitude could do a lot of damage if you’re planning to buy a home this year. Experts say that you should keep your available balance below the 30% use mark. This demonstrates fiscal responsibility.

2. Missing or making late payments. Along with maxing out or going above 30% use on your credit card, missing or making late payments shows lending professionals that you aren’t responsible with money. This sends up a massive red flag for them as they consider whether they really want to lend you hundreds of thousands for a home. So, put your best foot forward and always make your payments on time.

3. Opening new lines of credit. Incentives for opening up new cards can be tempting, but having too much credit makes lenders worried about the potential for you to acquire more debt. The important thing is to have a consistent payment history on an existing card.



You must demonstrate fiscal responsibility to lenders when buying a home.



4. Neglecting student loan payments. Not making these payments or not making them on time could put your chance of pre-approval at risk. Also, student loan debt does count against your debt-to-income ratio. If a couple is buying a home together and only one person has student loan debt, the other person may apply for the loan alone. Even in this situation, though, both people can still be on the title.

5. Keeping a near-zero bank balance. It’s expensive to buy a home. There’s the inspection, the appraisal, closing costs, and more. So, having a low balance in your bank account makes lenders wonder how you will afford your home purchase.

6. Jumping from job to job. Lending professionals will view this as a sign of inconsistent work history and, therefore, inconsistent income. When working at a job in a field where you have previous experience, you will need at least six months of work history from a single position to be approved. If you are working a job in a new field, you’ll need at least two years of work history. Transferring positions within the same company won’t count against you, though.

If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.