Buying a home can be an exciting prospect. It can also be a scary one, especially when it is your first home purchase. There are so many “moving parts” to the process and so much information out there that it is easy to get confused and frustrated, or even to overlook important tasks that can delay or even prevent funding options.

The Ryans are a young couple who were in that very situation. They had been renting an apartment since their wedding four years ago and finally felt ready to purchase their first house. They had been researching options for finding affordable homes and happened across the wholesale section of the Onyx Homes website. They opted to sign up for our free Preferred Buyers List to be notified when we have a home that fits their needs.

As part of their research, and to make more sense of the entire process, the Ryans asked friends and family for advice, what they wished they had known or considered before buying their first home. The following are the four “Don’ts” shared most frequently with them.

Don’t Forget to Get Pre-approved for a Mortgage

There is a definite difference between being “prequalified” and pre-approved. While both can give you a good idea of the amount you are likely to be approved to borrow for the purchase of a house, prequalification is considered a “first step” while preapproval requires additional documentation and verification. Preapproval usually requires a credit check, as well.

Zillow online explains, “With prequalification, you’ll supply an overview of your financial history to the lender, including income, assets, debts, and credit score. The lender will review this information to give you an estimate of what you would qualify for. Mortgage preapproval usually requires documentation and verification of your income, assets, and debts. And it will often require a credit check, which will result in a hard inquiry on your credit report.”

If you don’t know how much you are likely to be approved to borrow, you don’t know what price range to look in for a home and could end up disappointed if you fall in love with a home outside your price range.

Don’t Spend Yourself Into a Financial Bind

Just because you may get preapproved for a certain amount doesn’t mean you necessarily should spend that amount. Preapproval amounts may look good on paper, but that doesn’t always translate the same in “real-life.” Always plan for the “what-if’s” ….what if one of us becomes injured or ill and our income is reduced, could we still afford to pay our mortgage payment? What if we have a child in the next few years, could we afford those associated expenses in addition to our mortgage payment? What if we have to replace a vehicle, would we be able to make that payment in addition to our mortgage? This type of question should be a serious part of your conversation when making a decision about which homes to consider purchasing. And it should be a decision you make BEFORE looking at any homes so that you don’t give in to the temptation to stretch your finances beyond realistic limits.

Don’t Forget Other Expenses

When moving from an apartment to a house, or from a smaller home to a larger one, or even from one neighborhood to another don’t forget to consider additional expenses associated with that move. Expenses like utilities, home and yard maintenance and, Home Owner Association dues are just a few that should be evaluated when planning your move. Your realtor should have access to much of that information, but verify it yourself too. Call lawn care services and ask for basic rates for different yard sizes. Search online resources for estimated utility costs and homeowner association dues for neighborhoods you would be interested in.

Another expense category that often gets overlooked is furnishings for your new home. Additional bedrooms and bathrooms will require additional furniture and supplies. Will your current dining table and chairs work in your new dining room? What about outside or patio furniture? All of these questions need to be answered before you lock down your budget. Make sure you allow plenty of “cushion” in your budget for these expenses.

Don’t Destabilize Your Financial Status

Pre-approval for a mortgage loan doesn’t guarantee you will close on that loan. Lenders pre-approve borrowers based on factors that are presented to them at the time of pre-approval. If those factors change between pre-approval and closing on the loan, a lender may decide not to move forward with issuing that loan.

A lender will check your credit just before closing on the loan and, if you make a large purchase between pre-approval and loan closing, it will show up on that credit report. New financial obligations can be a reason for them to withdraw approval for your loan.

The same goes for a job change. Again, your pre-approval was based on existing factors at the time you approached the lender. Lenders look for income stability when approving loans. If stability in your job situation goes away because you switched jobs a lender may withdraw their approval. This is true even if you switched to a higher-paying job because there is no promise of how long you will be at that job – there is not a demonstration of stability.

Don’t Make Big Changes to Your Banking Habits

Before closing on a loan, lenders will ask for your most current baking statements and financial activity. Any large deposits into your account, or any sizable cash deposits, are both red flags to a lender. Again, it goes back to stability. A lender who is considering loaning you a substantial amount of money to purchase a home, wants to be certain – or as certain as possible – that you will be able to repay the funds. Any major change to your banking habits can create doubt in the mind of a lender. To avoid that, keep those activities as close to your established ones as possible. This can improve your chances of closing on a loan for which you have been pre-approved.

The Ryans approached the process in a very responsible and informed manner. Signing up for the Preferred Buyer List here at Onyx Homes also expanded their options. We buy homes in just about any condition, and after making repairs and improvements, we are able to pass along savings to our clients. Whether you are preparing to purchase your first home or your fifth or beyond, keeping in mind these five “Don’ts” can make the journey less stressful and more rewarding.