10 mistakes to avoid after you're pre-approved

Getting pre-approved is an important first step in buying your dream home, but it doesn’t guarantee the sale is a sure thing.

After you’ve secured pre-approval, it’s not only time to get serious about home shopping, but also to ensure that you make smart decisions to protect your financial standing.

Here are a few of the most critical missteps to avoid once you’re pre-approved.

1. Changing your income

Now isn’t the time to switch career paths or launch your own business. The amount you qualified for in your pre-approval is based on your two-year employment history. If you change jobs, you may be required to document 30 days or more with your new employer before you’re able to get final approval on the home loan.

2. Increasing your expenses

Your pre-approval takes into account your total income as it relates to your monthly expense obligations. Adding a car payment or increasing your revolving credit may impact the total amount a lender is able to offer.

3. Missing payments or being late

Few things will hurt your credit score more quickly than being late with payments — especially on an existing mortgage — or being excessively late (more than 30 days) on revolving credit or car loans.

4. Depositing large amounts of cash

While many loan programs allow for gifts to help with down payment money, thorough documentation of large deposits will generally be required. Keep a paper trail so that it’s easy to explain all activity in your bank account.

5. Failing to enlist a good real estate agent

Marketplace knowledge is one of the most important things an agent can offer you — but it’s also important to have a connection with the person you choose. Your agent should understand what you want in a home, help narrow the search, and even show you areas you may not have known about. When it comes time to make an offer and negotiate with the seller, you definitely want a good local agent with a strong understanding of property values in the area.

6. Falling for your first option

Resist the temptation to make an offer on the first home you like. Shop around and take your time — this is one of the biggest financial decisions in your life. Also, take time to become an expert in the area where you’re looking. Get to know the home values in the neighborhoods you’re considering, and ask your agent for the sale price of homes that have recently sold in those areas.

7. Getting distracted by cosmetics

A fresh coat of paint and new carpet may look great, but it can boast the asking price. If the house next door is priced lower but needs some TLC, keep in mind that you can often get a better deal by buying the less expensive home and painting the walls yourself.

8. Failing to plan for additional expenses

If you’re like most people, moving into your new home will immediately create a long list of needs and wants. Keep these potential costs in mind when negotiating and calculating your total monthly payment.

9. Neglecting to keep your lender in the loop

When you’re ready to make an offer, be sure to circle back with your loan officer and review what your payment will look like based on your current scenario.

10. Forgetting to enjoy the moment

When you’re in the thick of home buying, it’s easy to get overwhelmed by all the moving parts. But remember that this is the start of a new chapter in your life. Take lots of pictures of your new home, and make time to enjoy getting settled — most people look back on this time with fond memories.