7 big mortgage mistakes (and how to avoid them)

Although mortgage interest rates have recently pulled back some, they’re still historically low. When rates were lower yet, I decided to refinance the mortgage on our home.

With lenders spooked by COVID, requirements to approve mortgage applications went from stringent to absurd, especially if, like me, you’re self-employed.

Medium Brush Stroke

Here are seven easier to avoid mistakes that take your mortgage from difficult-to-approve to (nearly) impossible and what to do instead, taking it to less-difficult-to-approve.

Don’t Change or Quit Your Job Before or During the Application Process

Stay in your current job at least until your mortgage is funded. If that’s not doable, try to at least move immediately into a better-paying job

Don’t Throw Out Your Recent Tax Returns and W2s

This is a dead-simple one to avoid. Just keep your tax returns and W2s for at least the past couple of tax years.

Don’t Take on (or Co-Sign on) New Debt

To avoid this problem, don’t open a new credit card or another credit line, and don’t co-sign one of those while you’re in the process of applying for a mortgage.

Don’t Make Large Deposits into Your Accounts

Talk with your lender before you make such large deposits. They’ll tell you what documentation would solve the problem.