When you’re applying for a mortgage, it’s easy to find lists of action steps to take. You check your credit, get your financial papers in order, and save as much money as possible for your down payment. But did you know there are some common things you should never do when applying for a mortgage – things that could potentially cause you to lose your mortgage mid-application?
Here are some of the top things to avoid when applying for a mortgage.
1. Don’t make any big purchases. Hold off on buying that new car or boat until after your loan has closed. Even if you feel comfortable with all the new payments, your mortgage lender may determine that you are overextending yourself.
2. Don’t apply for new credit. It’ll lower your credit score. Keep your credit report as stable as possible. Your debt-to-income ratio is a big factor in your lender’s decision. Keep this percentage stable by not taking on new credit.
3. Don’t co-sign any loans. Co-signing a loan for a family member makes you liable for the debt if the main borrower defaults. These co-signed loans act just like a new credit inquiry for you.
4. Don’t miss payments. Your goal is to show your mortgage lender that you are a good risk for them. Therefore, make every effort to ensure you pay everything on time.
5. Don’t make big life changes. When applying for a mortgage, keep your life as stable as possible. Don’t start a new career with a new employer, start your self-employment venture, or quit your current job (no matter how much you may dislike your current position). Basically, don’t do anything that could make you look like a higher risk to lenders.
Remember, when you’re applying for a mortgage, financial stability is one of the key things lenders want to see. So don’t jeopardize your mortgage by doing anything on this list. Wait until after your mortgage is closed and you have the keys to your new home in your hands.
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