3 Mistakes That Could Get Your Mortgage Application Denied

Published On: November 3, 2021|Categories: Blog, Buyers, Home Buyers, Mortgages|Tags: Home Buying, Mortgage Tips|

It’s no secret that the mortgage application process is complex and often difficult. But did you know that there are a few simple mistakes that could get your application denied? This guide explains three of the most common mistakes people make when applying for a mortgage and how to avoid them.

3 Mistakes That Could Get Your Mortgage Application Denied

Three of the biggest mistakes that could get your mortgage application denied include:

Moving your money after you apply for a mortgage
Quitting your day job (or any other job)
Applying for new lines of credit

Scroll down for a closer look at each.

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Mortgage Mistake #1: Moving Your Money After You Apply for a Mortgage

When you apply for a mortgage, lenders will closely examine your financial history. This includes looking at your bank statements and tax returns to get an idea of your income, debts, and assets.

If you move money around after you apply for a mortgage, it could raise red flags with lenders. They may think you’re trying to hide something or that you’re not as financially stable as you appear.

To avoid this mistake, leave your money where it is until after you’ve closed on your mortgage.

Mortgage Mistake #2: Quitting Your Day Job (or Any Other Job)

Lenders want to see that you have a steady income and a good employment history. If you quit your job, it could make lenders question your ability to repay your mortgage.

Even if you have another job lined up, quitting before you close on your loan is a risky move. If something falls through or you have a gap in employment, it could delay or even derail your mortgage application.

The best way to avoid this mistake is to keep your current job until after you’ve closed on your loan.

Mortgage Mistake #3: Applying for New Lines of Credit

When you apply for a mortgage, lenders will pull your credit report and look at your credit history. If you’ve recently applied for new lines of credit, it could make lenders question your financial stability.

Lenders may also think you’re trying to take on more debt than you can handle, which could increase the risk of defaulting on your loan.

To avoid this mistake, wait to apply for new lines of credit until after you’ve closed on your mortgage.

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