What Not to Do Before Applying for a Mortgage
Let’s Talk About What Not to Do
You’ve decided you’re ready to buy a home, awesome! Before you dive in, there are a few things you’ll want to avoid that could seriously mess with your mortgage approval. Some of these might surprise you, but trust me, as a mortgage broker, I’ve seen them all.
1. Don’t Open or Close Credit Accounts
That shiny new credit card offer might look tempting, but opening new credit lines can lower your score and raise red flags for lenders. On the flip side, closing old accounts can hurt your credit history. The best move? Leave everything as-is until after closing.
Broker Tip: If you’re not sure how a credit move will affect your loan, text or call me first. I can give you a quick thumbs-up or thumbs-down before you take action.
2. Don’t Make Big Purchases
You might be itching to buy furniture or a new car for your future driveway, but hold off. Large purchases can change your debt-to-income ratio, which could cause your pre-approval to fall apart. Once you close on the house, then you can go wild at IKEA.
Broker Tip: Even if you plan to pay cash, ask me first. Some purchases can still cause account balance fluctuations that might need explaining during underwriting.
3. Don’t Change Jobs Without Talking to Your Lender
Switching jobs before or during the loan process can complicate things, even if it’s a better opportunity. Lenders like to see stability and consistent income. If a job change is unavoidable, talk to your mortgage broker first so we can plan around it.
Broker Tip: If the new job is in the same field and comes with a salary increase, we can often make it work, but timing and documentation matter big time.
4. Don’t Deposit or Move Large Amounts of Money Around
Any large or unexplained deposits into your bank account can trigger extra scrutiny from underwriting. Keep your finances simple and document where any big deposits came from. Gift money? Totally fine, but make sure it’s properly documented.
Broker Tip: Keep a “paper trail” for every deposit. If Grandma gives you gift funds, I can send you the proper gift letter template to make it smooth and compliant.
5. Don’t Miss or Be Late on Any Payments
Even one missed or late payment can knock your credit score down and delay your approval. Stay on top of all your bills, even the small ones. Consistency counts big time in the eyes of lenders.
Broker Tip: Set up auto-pay for all your accounts while you’re in the mortgage process. It’s one of the easiest ways to avoid a credit hiccup.
6. Don’t Co-Sign for Anyone
It’s nice to help a friend or family member, but co-signing for someone else’s loan adds new debt to your credit profile, even if you’re not the one making the payments. That extra liability can reduce your borrowing power.
Broker Tip: If you’ve recently co-signed, let me know. There are ways to document that the other person is making the payments, but it takes a little extra work.
7. Don’t Assume Every Lender Is the Same
Here’s one a lot of people overlook. Every lender has different programs, rates, and guidelines. That’s where working with a mortgage broker like me makes all the difference. I can shop across multiple lenders to find the best fit for your situation instead of you being stuck with one option.
Broker Tip: My advice? Always start with a broker. You’ll get more options, better pricing, and someone who works for you, not the bank.
