What Not to Do Before Buying a Home

No major purchases

That includes cars, appliances, vacations, or anything else requiring a prolonged payment plan. Qualifying for a mortgage in the Granite State largely depends on the existing expenses on your current income. In other words, banks look at your current debt(s), so don't add to them! If you want to celebrate your new home with a big purchase, wait until after you close on it. Then you can assess your expenses and figure out what you can afford, without worrying about killing your chance at a mortgage.

No new credit cards

Any time you open a new credit account, any inquiry is made on your credit. Excessive inquiries drag down your score, and looking for new sources of credit is interpreted as a higher risk for the lender. The impact on your credit scores might be small, but those already dealing with mediocre scores should beware.

No defaulting on your current credit card(s).  

Reliably paying your bills on time is wise in any scenario, but especially before applying for a mortgage.

No moving money or switching jobs

Lenders like stability, and that means a steady job, income, and checking/savings accounts with your bank. If you can help it, don't change any of them. Hold on to your job, and keep your money in the same account(s), with the same bank.

No big cash deposits

Lenders want to see the funds for your closing costs and down payment in the same account for at least two months. Avoid dropping any big amounts of cash in to your account(s).

No co-signing loans

Even though you're not making the payments, signing your name on someone else's loan agreement increases your own debt-to-income ratio ? not pleasing to the eyes of your potential lender. Friends and loved ones will have to get someone else this time.