4 Things You Should Never Do When Applying For a Mortgage


Midland Mortgage knows how important home ownership can be. While applying for a mortgage can seem like a difficult task, avoiding the following pitfalls will help make your loan application process run more smoothly and get you one step closer to the home of your dreams.

Don’t Change or Quit Your Job

Income is an important part of obtaining your mortgage. Lenders want to see consistency in employment history for ideally a year or two so that they feel comfortable that their borrowers will remain gainfully employed. If you have to make a job switch, it may be easier to explain as long as it is in the same field, but avoid a change during your loan process if possible.

Don’t Make Any Large Credit Purchases

Often with buying a home comes the need for large purchases either for furnishing or renovations, but during your loan application is not the time to make any of those big purchases unless you can pay cash. Opening new lines of credit will negatively affect your credit score by counting as recent inquiries and new credit as well as reducing points for having balances that have not had much paid down on them yet. No matter how tempting, wait on large purchases until after you close.

Don’t Make a Payment on a Collection Account

While many borrowers think that making a payment on an old collection account will help look like they are addressing their debt, it can lower your credit score and reactivate an old debt that may be close to leaving your record. By making a payment, you are revalidating the debt, and it can restart the 7 to 10-year process all over again and show on your credit report as a recently active collection.

Don’t Close Any of Your Credit Accounts

Older credit accounts that have no balance not only give you a longer history on your credit report but all reduce your credit utilization number, If you close these accounts, you will reduce your available credit, often create a high utilization and sometimes negatively affect your debt to income ratio. Leaving the account will not cause you any adverse effects, so it is best to only leave them open during your loan application process.

If you would like more information on the dos and don’ts of applying for a mortgage or would like to start the application process, contact the mortgage specialists at Midland Mortgage today.

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