Top 5 Things to Avoid Before Applying for a Mortgage

A Home Buyer’s Guide

Buying a home is one of the biggest financial decisions you will ever make. If you’re like most people, you’ll need to get a mortgage to finance your purchase. Before applying for a mortgage, there are a few things you should avoid doing. By following these tips, you can increase your chances of getting approved for a mortgage and securing a favourable interest rate.

1. Don’t apply for new credit. Opening new credit accounts can lower your credit score, which can make it more difficult to get approved for a mortgage. Lenders want to see that you have a stable credit history and that you are not taking on more debt than you can handle.

2. Don’t make any large credit purchases. Large purchases like flashy new cars can also lower your credit score and increase your debt-to-income ratio. Lenders want to see that you are able to save money and that you are not living beyond your means.

3. Don’t change jobs. Lenders like to see that you have a stable employment history. If you recently changed jobs, it may be more difficult to get approved for a mortgage.

4. Don’t fall behind on your bills. Late payments can hurt your credit score and make it more difficult to get approved for a mortgage. It is important to make all of your payments on time, every time.

5. Don’t ignore your credit report. Before applying for a mortgage, it is important to review your credit report for any errors or issues.

By avoiding these five things, you can increase your chances of getting approved for a mortgage and securing a favourable interest rate.

Additional Tips

• Get pre-approved for a mortgage before you start shopping for a home. This will give you a better idea of how much you can afford to borrow.
• Be prepared to provide documentation to your lender. This may include tax returns, pay stubs, and bank statements.
• Be patient. The mortgage process can take time.
• Seek advice from a professional. Your mortgage is likely to be your biggest debt and highest outgoing. Make sure your mortgage is tailored correctly to your circumstances.

Conclusion

I hope these tips help you avoid some of the common pitfalls of applying for a mortgage. With a little planning and preparation, you can increase your chances of getting approved for a mortgage and securing a favourable interest rate.