What ‘NOT’ To Do When You Apply For A Home Loan

While there are a list of guidelines and rules that you might have followed before and during your home loan application process, it is also important to keep in mind the list of ‘don'ts’. It matters that you be very careful during this crucial period of your life when you are very close to making your home dream come true. It is necessary to keep these pointers in mind because you do not want to loose your chance of getting a home loan. Not only will being careless reduce your chances but will have an impact on the interest rates offered and other perks that you would have otherwise been eligible for. For example, it is better to avoid getting into more debt or abusing your credit card during this time period. Read on further to read more about the list of things that you should avoid during, before and after the home loan application process.

• Do not accumulate debt: Remember, when you are preparing to file your home loan application, it is wise not to accumulate any type of new debt in the form of personal loans, car loans or other types of outstanding credit. This will definitely have a huge impact on your eligibility criteria. Not just this, this will also have an impact on your credit score and put you in the category of a ‘high risk borrower’. So, keep in mind that before, during and even after the home loan application process, do not take any other type of debt.
• Do not become a co-borrower or a offer guarantee: Though you may want to help someone in need of debt, remember, this is not the best time to become a co-borrower or offer a guarantee on another loan that your friend or relative might be applying for. It may be hard to say a no, but explain to them politely why you cannot help them at this point in your life. Do not be under the misconception that you can co-sign once the home loan application is approved. You need to be very careful till you finally settle the loan.
• Do not lose track of your credit score: Even, before you apply for a home loan, you have to make sure you build a good credit score, based on which the lender will be confident enough to give you a home loan. Start building your credit score well in advance and do not wait till the last minute. Also make sure that you do not do anything that will have your credit score drastically even after you have applied for a home loan. Make sure you are paying all bills on time and if it is not possible to keep all deadlines in mid, set up automatic payments or even payment reminders.
• Do not close a credit card account: Think that closing your credit card account is the best idea? No. It may probably be the worst idea because your credit card is one of the main factors that are used to access your eligibility criteria. And, if you suddenly close a credit card account, it may lead to unnecessary suspicion and may also have a negative impact on your overall credit score even if you have made all payments on time and do not have an undue credit on the card that you may be holding.
• Do not switch jobs or make other career moves: This is definitely not a good time to change a job. Ideally, you should have a stable and secure job to be able to take a home loan and also pay it back. Also, if you are planning to go for higher education, this may not be a great time. A home loan is a long-term commitment and thus you have to be fully prepared for this move. Do not change a job suddenly before you apply for a housing loan. Though it is okay to switch jobs, make sure you do not look like you are a job hopper to the lender.
• Do not make any expensive purchases: If you make a very expensive purchase just a few weeks before you apply for a home loan, it will send across a very wrong message to the lender. Also, it is important to save some money and have some liquid cash in hand during this process. Another thing to remember is that if you have made this purchase on your credit card, it is even more worrisome as it will hit your credit score in a big way and potentially cause irreversible damage.
• Do not go overboard with your expenses after taking a home loan: It's an occasion to celebrate once your home loan application has been approved but do not go overboard. Remember that you are being constantly watched and it not the right time for you to splurge on your expenses. Focus more on paying back the loan and less on other aspects.
• Keep your personal information safe: One of the other most important factors to keep in mind is to keep your personal information safe and secure. Do not reveal any personal financial information to anyone else at any point of time and be very cautious.
• Do not go overboard: Before you apply for a home loan check and see if you will be able to pay a monthly installment and can actually afford it. Do not choose an EMI that you will not be able to commit to pay just because you want get a home loan. Do not forget that even banks will not approve your home loan application if you make unrealistic commitments. 

Some Takeaways
Be cautious at very step when you are preparing to apply for a home loan. It is nearly impossible to buy a house without applying for a loan in today’s world, so be prepared to take the risk and at the same time also be able to commit to the same in a responsible manner.