Deciding to buy a house is a huge decision to make. Homeownership comes with a lot of responsibilities that you have to make sure that you are prepared for. The process of becoming a homeowner can be a long and sometimes difficult one as well, which means you’ll want to prepare yourself mentally for that possibility. There are a lot of steps to take when you first decide to buy a home. However, there are also a lot of mistakes that you can make during this period as well. The following are a few things that you should avoid doing when buying a house:

  • Over using your credit – Your credit score is very important in obtaining a mortgage with good terms. Bad credit can lead to lenders hiking up the interest rate or disqualifying you altogether – so stop using those credit cards and begin paying down your debt! Don’t even put small items on your credit cards if it’s possible not to as this can affect your debt-to-income ratio. If anything, you should begin paying down your credit card debt in order to help improve your score.
  • Pay your bills late – Late payments can really hurt your credit score. Paying one bill 30 or more days late can hurt your score by as much as 110 points! This may not be too big of a deal if you still have a score hovering around 800 – but if the late payment was on rent or a mortgage, the lender is going to think twice about qualifying you. If you can’t pay your rent on time, how do they know you’ll pay your new mortgage on time? And if you were late on a previous mortgage – well, that’s a huge red flag.
  • Moving money around – In addition to looking at your credit, lenders will also take a look at your bank statements. They want to make sure that you’ll be able to pay for a deposit. Some people will borrow money from family for the deposit and put it in their bank account. While this is perfectly fine, you should do this months in advance. Lenders will frown upon any major deposits or withdrawals – especially if you don’t have a paper trail to account for them.
  • Co-signing on a loan – Financial experts never recommend co-signing on a loan, no matter what the situation is. If you co-sign on a loan for a friend or family member, it could end up straining your relationship with them if things don’t work out. If the person you are co-signing for stops making payments on the loan, then you are responsible for that debt. Not only can that leave you in a poor financial situation, it could destroy your credit. Lenders will also consider that as another monthly obligation – even if the person you co-signed for is incredibly responsible and pays all of his or her payments on time. It’s going to hurt your debt-to-income ratio and assets no matter what.
  • Employment changes – When lenders look at your background, they want to see financial stability. If you’ve just lost your job or even if you are just starting your own business, they are more likely to disqualify you. In fact, if you get a promotion but a portion of your income gets shifted to a commission basis, it could hurt you!

These are a few things that you should avoid doing before buying a house. Be sure to obtain a credit report so that you know what your credit score and history are as well.