10 Things NOT to Do Before Purchasing a Home

When you begin the process of purchasing a home, there are many things that you want to make sure you do. But it is also important to think about the things you should not do before purchasing a home. Every last dime, nickel and penny you spend, and how it is spent, before purchasing a home can factor into whether you will be approved for a mortgage and at what rate.

Here are 10 things you SHOULD NOT DO before buying a home, provided by Move.com:

1. Don't buy any form of transportation that you will have to finance. This would increase your debt-to-income ratios and that is something important that loan officers won't want to see.
2. Don't change your job before applying for a home loan (unless absolutely necessary). You wan't to show lenders stability, which will show that you will be less likely to default on your loan.
3. Don't default on your credit card payments. A track record of responsibility and money management is a must.
4. Don't make large deposits into your bank accounts. Lenders like to see the money that will be used towards your down payment to be have been sitting in your account for at least two months to show that they didn't just appear out of no where.
5. Don't change banks. Like your employment history, you want your banking history to show stability as well.
6. Don't spend your money for closing costs. Part of the price of financing a loan is the closing costs and you will likely have some responsibility for paying them. Be sure to have enough money set aside to take care of these additional costs.
7. Don't co-sign a loan for anyone. Even when you're not the one making payments on a loan, co-signing will still increase your debt-to-income ratio.
8. Don't make large purchases on a credit card. Charging these items will also increase your debt-to-income ratio and now is not the time to do so.
9. Don't lie or provide false information on your loan application. This includes not leaving out any debts or liabilities you have. Remember, if you do it could be considered an act of fraud.
10. Don't have inquiries made into your credit. Keep in mind that every time you open up a new credit card account, an inquiry is made to your credit, even if you don't use the card. Looking for new credit is translated into higher risk for lenders. Mortgage related inquiries typically don't have this affect because the assumption is made that you are "rate shopping". These inquiries probably won't have a huge impact in calculating your ability to repay a loan, but why take the risk if there is no immediate need.