10 Ways to Lose Your Dream Home (Part 2)

car with tires spinning or burning rubber

Don’t tell me what to do. Tell me WHY I shouldn’t do it so I can learn.

 Last post we learned about why quitting your job, buying a new car or using your credit cards can cause you to lose your dream home (if you missed that post, look here).  Now let’s tackle a few more things you don’t want to do if you’re buying a home. Well you shouldn’t do if you actually want to close on that house you have under contract.

of buying a home

Thou shalt not spend money you have set aside for closing.

This is a big one. People seem to spend money like water…especially when they are in the process of buying a home. Stop. Don’t do it.

 I’m not saying to not spend any money. I do want you to pay your current bills and eat. But, outside of the money you absolutely have to spend to have food and shelter, you shouldn’t spend any money. See a great new suit….don’t buy it. Find the perfect couch for your new house???? It won’t look good on a curb instead of in your new home.

What I am saying is not to spend anything you don’t have to. This isn’t a cold turkey budget process. It’s because your loan has been approved based on your assets.  That means I have counted every penny you told me about. If you aren’t using it for your cash to close then I have counted it in your reserves. Reserves are the money you have left over after closing to take care of any emergencies. Having reserves can mean the difference in your loan being approved or declined. If something does come up, talk to your loan officer first. They can tell you if that expenditure will be the nail in the coffin or will slide on by like water off a duck’s back.

Thou shalt not spend money you have set aside for closing. Click To Tweet

freeze your credit

Thou shall not omit debts or liabilities from your loan application.

 Let’s call it what it is. Fraud. Misrepresenting your debts is considered fraud. You are required to disclose all debts, including any alimony or child support that you pay. (Side note: you aren’t required to disclose all of your assets or income- only what you want considered in qualifying for the loan). And, your lender is going to find out. You would be surprised at what the documentation you provide will reveal. Don’t get caught doing something stupid. Your lender is here to help you. If at all possible they will make your loan work. If not, that “no” is the kindest thing they can do. You don’t want to have  such a massive house payment that there is no room for any fun or food in your life.
girl dancing in red dress

Thou shalt not buy furniture.

 Right. Don’t do it. Those pictures in magazines rock. You want your new house to rock. I know that those commercials have good pitch. Buy now, make no payments until sometime next century. But, I have to look at every debt you have…regardless of whether you have to make a payment at this time. Eventually you will have to make a payment; so, I have to count that debt in your debt ratio.  Remember how I said that couch would look on your curb? Yeah, not so much. It looks better in your house. Let’s make sure you get your house and buy the furniture after you move in.

cat sitting on a couch

Thou shalt not originate any inquiries into your credit.

Like not disclosing your debts, we will find out about new loans. There is no way we won’t. We have what is called UDM or undisclosed debt monitoring. The credit bureaus alert your lender if you have a new credit inquiry. This will cause your lender to ask you if you have a new debt. At best, this will cause a delay as the underwriter may need to look at your loan again. At worst, that new debt could kick your debt ratio into overdrive and cause your loan to be declined. Bye-bye new house.

This leaves us with three more ways to lose your dream home. Join us next post to learn the why behind the last of the 10 Commandments.

Don't kick your debt into overdrive! Click To Tweet

car with tires spinning or burning rubber

If you have a burning question or just want to chat — I love to be social……you can reach me on Twitter (@ChrisEllaLoans), Snapchat (ChrisElla2), CyberDust (ChrisElla), email ChristyS@StarkeyMtg.com, at the office at 912.721.9400, and my website at www.LoansWithChristy.com . Find out more about me and more ways we can network (Facebook, Instagram, Twitter) at www.about.me/chrisella

As always, if you liked this article please like, share, or comment…….or all of these things; they are greatly appreciated.

45 thoughts on “10 Ways to Lose Your Dream Home (Part 2)”

  1. I remember the temptation to buy all manner of goodies for our new home – before we had even closed on it. Thankfully, sanity prevailed and we held onto our money. Once we had lived here for a bit our ideas and tastes had changed anyway so when we knew we could afford to buy the goodies there was no waste. Great tips once again.

  2. Loving this Christy… and wonder why it sounded so familiar.. bhahahaaha. (BTW we do need to add you as a new user cuz the name thing does show up)… loved the Click to Tweets too… lots of stuff.. great reminders for those in the home buying process.

  3. These are great tips to those buying a home. So glad I won’t be doing that for a while, but will remember these tips, especially, not to buy furniture. 🙂

    1. Glad you are in a home you love Karen. Yes, buying furniture is one of those easy tips. It is all about timing.

  4. These are great tips, Christy. I’ve seen SO many people buy more home than they could afford, and then not have the dollars to buy drapes except on credit.
    Thank goodness, I had the best money teacher in the world–my mom. To this day, I carry no debt!

    1. Susan, I am so glad that you had a great financial role model. Congratulations on a great accomplishment. Christy

  5. Great tips for those in the home market. Over buying is far too easy these days and unfortunately many in our our society markets to put you in debt. Your guidance will be so valuable for those that need support and the real picture.

    1. Sonya, it is super exciting. Sensible shoes aren’t exciting, but maybe sensible mortgages can be :O Christy

  6. Sound advice, Christy. It’s easy to get caught up in the excitement of it all and not be practical. But focusing on the end goal is the real reward. Saving will help you do that.

  7. The GREAT thing is closing for us has always only taken about 30 days. It’s pretty easy to choose not to spend anything out of the ordinary for 30 days. The commitment isn’t 30 years – unless you buy more house than you can afford. 🙂

    1. Brenda, that is about the normal timeframe (new construction takes longer as you have to wait to buy the house). I think about what you just said like the tips for a new car, drive slowly and break carefully for the first few hundred miles to wear your breaks in…..maybe we should learn to be a bit more financially conservative for the next 30 years and drive our cars a little different for their lifetime…..maybe that would save us a lot of frustration. Simple Not Easy. Christy

  8. Often small purchases cause we are excited & after all, this is not really expensive, becomes more. It adds up & then your couch lands on the curb. I love that you are providing advice to people to save them from big mistakes when buying a home.

    1. Thank you Roslyn Nothing is more heartbreaking than to tell someone that they can’t buy their home. Christy

  9. Do people really do that? You know, go out and buy a load of stuff for their new home before they OEM it. Surely that’s one of the pleasure to enjoy once you’ve moved in. Sage advice there Christy. Thanks.

    1. Clive, sadly it is true (especially sad when that means they can’t actually purchase their home). Patience is a virtue. Christy

  10. Great tips in this post, Christy, reminding new home buyers to stay focused on the goal…their new home. It’s easy to dream ahead and spend money on things before you actually need them. I know our laws on down payments and mortgages are quite different here in Canada. I got caught in the housing crisis with a U.S. property and having just seen “The Big Short”, it is scandalous how the big banks go away with what they did. So many people lost it all and I hope your tips and advice through your experience is supporting people to get back into home ownership safely.

    1. Thanks Beverly. I recently saw “The Big Short” myself. It was funny, but it wasn’t funny. The scene in Florida with the alligator cracked me up (after I climbed down from the ceiling…that alligator scared me too). Sadly, our industry had a few bad characters. The new regulations and loan officer licensing have helped tremendously with getting rid of the bad actors. Christy

  11. Excellent list from an insider’s perspective. Great advice, including a couple of points I hadn’t known (like inquiring into your debt). Didn’t realize that was going to be a red flag for some lenders.

    1. Jackie, yes a new inquiry is a red flag for nearly all lenders The concern is new debt that wasn’t taken into account on the application. Crazy, but true. Christy

  12. These are great tips to follow when buying your home. I remember when I bought my first home, it seems like the things I wanted just kept appearing…The dining roomset I wanted..my..my the temptation. I did resist
    and chose the house?

    1. Latasha, great choice. The smaller items to turn the house into a home will make their way to you. Christy

  13. At first,I thought this is interesting, but it doesn’t apply to me. I have no plans to buy a house as I’m happy in the one I’m in. But then I thought, you never can say never. If it comes to pass, I’m certainly going to take your advice. These are great tips that I’m going to pass on to others.

    1. Joyce, I hope you stay very happy in your home. But, you are right, never say never. Have a wonderful weekend. Christy

  14. My realtor told me she too had encountered clients who purchased stuff to go in their house BEFORE actually buying the home!! So strange to me, but I suppose some folks feel the need. 🙂 I guess they just don’t know any better – BUT I hope they are all lucky enough to come across this post and learn a thing or two!

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