Things to avoid in the lead up to your mortgage application

Things to Avoid in the Lead-Up to Your Mortgage Application

Getting a mortgage is an exciting step, but it requires careful preparation to avoid unnecessary hurdles. While getting your paperwork ready is essential, equally important are the things you shouldn’t do before submitting your application.

Some common mistakes can hurt your chances of getting approved or limit the deals available to you. Let’s walk through what to avoid to ensure a smooth process.

Preparing for Your Mortgage Application?

The months leading up to a mortgage application are crucial for showing lenders that you’re a reliable borrower. Lenders will examine your income, spending habits, and overall financial situation with a magnifying glass, so it’s important to stay on top of your finances.

Large Purchases on Credit

Thinking of buying a new car or splashing out on expensive furniture? Now isn’t the time. Large purchases on credit can impact your debt-to-income ratio and raise red flags with lenders. Save those purchases for after your mortgage is approved.

Opening New Lines of Credit

Applying for a new credit card or taking out a loan just before a mortgage application is a big no-no. Lenders might view it as risky behaviour, and hard credit checks could temporarily lower your credit score.

Late Payments

Late payments on bills, credit cards, or loans can heavily impact your credit score. A single missed payment could make lenders question your reliability. Set up reminders or direct debits to ensure every payment is made on time.

Avoid Changing Jobs or Self-Employed Status

Job stability is key when applying for a mortgage. Switching jobs or transitioning to self-employment can create uncertainty for lenders, even if it’s a positive career move. If possible, wait until your mortgage is approved before making any changes.

Keep Your Bank Statements Squeaky Clean

Lenders will review your recent bank statements to understand your spending habits. Avoid anything that looks unprofessional, like gambling transactions, unexplainable cash deposits, or frequent overdrafts. Keep things tidy and straightforward.

Why These Steps Matter

By avoiding these common mistakes, you’ll present yourself as a low-risk borrower, making it easier to secure the mortgage you need. Preparation and patience are your best tools for success!