Avoid These 5 Mistakes Stopping You From Getting a Mortgage

By DeVonna Meyer

DeVonna has spent over 43 years building lifelong relationships in South County and has sold hundreds of homes from San Jose, Morgan Hill, Gilroy, and Hollister Cities.

Are you excited to finally buy a home but need that mortgage approval? I understand that sometimes it is hard to wait to buy that dream home, but then take into account your financial activities to avoid costly mistakes before closing. Here are five common mistakes that you should avoid when planning to get a mortgage:

1. Do not deposit large amounts of cash. Cash deposits are not traceable, and lenders need to determine where your money is coming from by looking at your bank statements. If you are planning to deposit large sums of money, it’s better to discuss this beforehand with your lender and provide proper documentation.

2. Avoid making any large purchases. Large purchases like furniture, appliances, or other expensive home-related items can disqualify you from being approved for your mortgage. This is a red flag for your lenders, and borrowers with new debt are seen as a risk in the eyes of lenders. So resist the temptation to buy that new car or go on an expensive vacation on credit until after closing to avoid weakening your FICO score.

3. Do not co-sign loans for anyone. There are times when family members need some financial help but hold off on agreeing to cosign until after the transaction for your home closes. Cosigning on a loan means that you are making it a priority and that you are accountable and committed to that loan’s success.

4. Do not switch bank accounts. As mentioned earlier, lenders need your bank statement as a source to track your assets. Switching banks in the middle of an escrow may disqualify you from loan approval.

5. Do not apply for a new credit. Take note that your credit report will be checked multiple times during the transaction, and applying for a new car or credit card impacts your FICO score.

Those are the five main things to avoid when applying for a mortgage. If you have more questions or information on how to get your mortgage approved and how to proceed with your home-buying process, reach out to me. You can reach me and my team by phone or email. We will assist you and guide you through the process.