Preapproval letter just the beginning
For many potential buyers, frugality ends the minute they get preapproved for a mortgage, Phipps says. That's when they start running up the cards and opening new lines of credit to buy things for their home-to-be.
But that preapproval letter is just one of the first refreshment stations of the homebuying marathon, not the finish line.
Just before closing, a lender will re-examine a prospective buyer's financial situation -- complete with a recent copy of the credit history and other updated information.
If those numbers have changed for the worse (salary decrease, higher card balances, new lines of credit), then the applicant could get clocked with a higher interest rate or even lose the loan. "The number of buyers who get denied is significant," Phipps says.
Know your credit, and be aware of all lines of credit issued to you, before getting preapproved. See your credit report at myBankrate.
What the agent wishes you knew: Never get new loans or start using credit cards more heavily until after you've actually closed on the home.
Even better, retain your frugality until you've been in the home for a few months and have a good sense of how homeownership affects your finances, Phipps says.