What To Avoid During The Mortgage Process: 9 Common Mistakes

Avoid these 9 common mistakes buyers make during the mortgage process to help ensure your application stays on course for a successful closing.

Buying a home can be a long process – sometimes taking months. Once your mortgage application is submitted, stability across various areas becomes key. Lenders assess your financial profile based on the information you provided, so it’s important to avoid major changes until your loan is finalized.

While you’re moving through the process, here are a few things to avoid to help keep everything on track.

9 Things To Avoid

1. Changing Jobs Or Income Structure

Avoid switching employers, resigning from your job, or moving to self-employment during this time. Lenders look for stable, predictable income, and changes may require additional review or documentation.

2. Taking On New Debt

Financing a new car, furniture, or other large purchases can increase your debt-to-income ratio  and impact your loan approval.

3. Increasing Credit Card Usage Or Missing Payments

Higher balances or late payments can lower your credit score and raise concerns during underwriting.

4. Moving Your Money Between Financial Institutions

Keeping your accounts consistent helps maintain a clear financial picture. Switching banks or moving funds unnecessarily can complicate documentation.

5. Draining Savings Or Investment Accounts

Your savings may be needed for closing costs, reserves, or verification. Large withdrawals can raise questions and affect your loan eligibility.

6. Making Large Or Unusual Deposits

Lenders may need to verify the source of any significant deposits. Ideally, funds for your down payment should already be in your account for at least two months and properly documented.

7. Leaving Out Debts Or Providing Inaccurate Information

Be upfront and accurate on your application. Undisclosed liabilities or misrepresented income can delay your loan or prevent approval altogether.

8. Applying For New Credit

Opening new credit cards or loans can trigger credit inquiries and change your financial profile, which may affect your approval.

9. Co-Signing For Someone Else

Even if you’re not making the payments, co-signing a loan adds to your financial obligations and can impact your ability to qualify.

Keep Your Homebuying Process On Track

In general, don’t do anything that’ll have a significant impact on your finances or credit score without first consulting your Mortgage Loan Officer.

Staying consistent with your finances during the mortgage process can help prevent delays and keep your closing on track. Even small changes – good or bad – to your income, credit, or assets may require review, so it’s best to hold off on major financial decisions until your loan is finalized.

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