The Biggest Mistake Home Buyers Make
Let’s get one thing straight right away — THE biggest mistake people make is not using me as their agent:)
But, besides that, the biggest mistake people make when buying a home is taking on new debt. Taking on new debt prior to closing on your home can hurt your credit and sometimes can even muddle the deal.
Here are some things to avoid after you’ve been preapproved but before you’ve closed on the purchase of your home:
- DON’T Open Up any New Credit Accounts
- DON’T Buy a New Vehicle
- DON’T buy Furniture
- DON’T buy Appliances
- DON’T make any purchase on credit
- DON’T make any major purchase without checking in with your mortgage loan originator
Scenario 1
You are “under contract” to purchase a new home. You are a Do-It-Yourselfer and you’re excited to make improvements on the home you about to buy. You go to Home Depot (or Lowes or Menards or wherever) to purchase tools or items you plan to use to improve your soon-to-be home. At check-out, the clerk tells you how much you can save by opening up a merchant credit account. Tempted by the nice savings, you fill out the form and open up a merchant account.
Result: You may have just muddled your mortgage and muddled the deal on your new home. Opening up new credit accounts while in the process of buying a home messes with your credit. Don’t do it.
Scenario 2
You are the buyer in a “pending” sale. You are moving to a new state from quite a distance. To make sure you can make the transition safely and without vehicle issues, you buy a new vehicle so you can be confident in your travels to your new home state and new home.
Result: You may have just muddled your mortgage and muddled the deal on your new home. Buying a new vehicle, whether it’s on credit or not, while in the process of buying a home messes with your credit. Don’t do it.
Scenario 3
You have a fully executed purchase agreement with some contingencies still needing to be satisfied (such as a mortgage). You loved the home but the appliances in the home were very old and needed updating. You notice an advertisement for “One year same as cash” for all new appliances, and it’s a great deal. Because you won’t have to pay for a whole year, you go for it!
Result: You may have just muddled your mortgage and muddled the deal on your new home. Buying items under a “One Year Same as Cash” type deal can affect your credit. Make sure. Read this for more details!
Conclusion
The most important thing to remember, especially as a first time home buyer, is that you should get into the habit of saving money and paying off your debts as quickly as possible. This means that when you move into a new home, don’t go out and spend all of the money on furniture – instead, try to find some cheap second-hand furniture. Facebook Marketplace is a great place to look!
This way, you can save your money and eventually own your home outright. This is a much better option than spending all of the money on furniture you probably don’t need in the first place!
