It's wise to hold off on making a big purchase three to six months before buying a new home. If you have your money in saving or an investment, keep it there. Your credit profile needs to be solid when you go to get approved for your home loan, so you should avoid any big chances with your credit profile. Lenders need to see that you’re reliable and they want a complete paper trail so that they can get you the best loan possible. Opening new credit cards, or taking out a new car loan may weigh down your debt-to-income ratio and you may find a hard time getting a loan.
Practicing good spending habits may seem like a no brainer to most people, but it’s important to have enough money saved up for the home that you want to get. You’ve got to consider the down payment, closing costs, third party fees and general costs that come with moving into a new home that aren’t mortgage related. Having a solid foundation built in your savings account is important to cover these costs. Also, don’t get your head in the clouds thinking you can buy a house out of your income bracket. You’ll shoot yourself in the foot buying a house out of your budget and you’ll end up playing catch-up for every payment to come. That's what they call "House-Poor"!
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