What not to do when you're applying for a mortgage

In my many years of selling real estate, I have seen and heard about many clients who hit roadblocks with their mortgage applications. I've gathered a list of important DON'Ts that you can use to avoid making similar mistakes with your own applications. These warnings are what I give my own clients when we are working through the application process.

First rule of thumb: don't mess with your finances when you apply for a home mortgage. Any bank will want to pull your credit score, and you want to keep your credit from being pinged too many times in a certain time frame.

Here's what not to do:

New credit cards and credit lines

  • Don't make a major purchase (i.e., a new car, boat, jewelry, etc.)
  • Don't open new credit cards
  • Don’t buy any furniture
  • Don’t apply for new credit until AFTER you close on your mortgage
  • Don’t take out new loans
  • Don’t finance any elective medical procedures

Existing credit cards, loans, and accounts

  • Don’t transfer credit card balances from one account to another
  • Don’t pay charge offs without a discussion with lender first
  • Don’t pay collections without a discussion with lender first
  • Don’t pay off any loans or credit cards without discussing with lender
  • Don’t close any credit card accounts
  • Don’t max out or over charge on your credit card accounts
  • Don’t consolidate your debt into 1 or 2 credit cards

Income and occupations

  • Don't quit your job to change industries or start a new company
  • Don't switch from a salaried job to a heavily-commissioned job

Accounts, gifts and assets

  • Don’t change bank accounts
  • Don't transfer large sums of money between bank accounts
  • Don't forget to pay your bills -- even the ones in dispute
  • Don't accept a cash gift without filing the proper "gift" paperwork
  • Don't make random, undocumented deposits into your bank account

Don't put yourself in jeopardy just as you are applying for a home loan for which you have pre-qualified!

If you can avoid these common pitfalls, your mortgage financing process can run much more smoothly. 

PO Box 2045
Blowing Rock, NC 28605