The Top 5 Mortgage Mistakes to Avoid
Buying a home can be an exciting and rewarding experience, but it can also be a daunting and overwhelming process, especially for first-time homebuyers.
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Mortgages are a significant financial commitment, and making mistakes during the process can have serious consequences. In this blog post, we'll explore the top 5 mortgage mistakes to avoid.
1. Failing to Check and Improve Your
Credit Score
Your credit score plays a significant role in determining your eligibility for a mortgage and the interest rate you'll receive. Many first-time homebuyers make the mistake of failing to check their credit score or not taking steps to improve it before applying for a mortgage.
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To avoid this mistake, check your credit score and take steps to improve it if necessary. This may include paying off outstanding debts, making on-time payments, and disputing any errors on your credit report. A higher credit score can lead to a lower interest rate and a more favorable mortgage offer.
2. Ignoring
Closing Costs
Another common mistake is ignoring closing costs. Many first-time homebuyers are unaware of the various fees associated with closing a mortgage, such as attorney fees, title search fees, and appraisal fees. These costs can add up quickly and significantly impact the total cost of the mortgage.
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To avoid this mistake, research the average closing costs in your area and budget accordingly. Be sure to factor in these costs when considering the overall cost of the home.
2. Ignoring Closing Costs
Another common mistake is ignoring closing costs. Many first-time homebuyers are unaware of the various fees associated with closing a mortgage, such as attorney fees, title search fees, and appraisal fees. These costs can add up quickly and significantly impact the total cost of the mortgage.
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To avoid this mistake, research the average closing costs in your area and budget accordingly. Be sure to factor in these costs when considering the overall cost of the home.
3. Not Getting Pre-Approved
Getting pre-approved for a mortgage is an essential step in the home buying process. Pre-approval gives you a clear idea of how much you can afford to spend on a home and helps you avoid the disappointment of falling in love with a home you can't afford.
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To avoid this mistake, get pre-approved for a mortgage before you start shopping for a home. This will help you narrow down your search to homes that are within your budget and prevent you from wasting time on homes that are out of reach.
4. Taking on Too Much Debt
Taking on too much debt before or during the mortgage process can have serious consequences. Lenders look at your debt-to-income ratio when determining your eligibility for a mortgage. If you have too much debt, you may not qualify for a mortgage or may be offered a higher interest rate.
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To avoid this mistake, avoid taking on new debt before or during the mortgage process. This includes opening new credit cards, taking out a car loan, or making large purchases on existing credit cards.
4. Taking on Too
Much Debt
Taking on too much debt before or during the mortgage process can have serious consequences. Lenders look at your debt-to-income ratio when determining your eligibility for a mortgage. If you have too much debt, you may not qualify for a mortgage or may be offered a higher interest rate.
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To avoid this mistake, avoid taking on new debt before or during the mortgage process. This includes opening new credit cards, taking out a car loan, or making large purchases on existing credit cards.
5. Choosing the Wrong Mortgage
Choosing the wrong mortgage can be a costly mistake. There are various types of mortgages available, and each has its pros and cons. Choosing the wrong mortgage can lead to higher interest rates, higher monthly payments, and a more significant financial burden in the long run.
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To avoid this mistake, research the different types of mortgages available and choose the one that best fits your financial situation and goals. Don't be afraid to ask your lender questions and seek advice from a financial advisor.
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🔥 The 5 Biggest Underwriting Mistakes Borrowers Make — And How to Avoid Them in 2026
🔥 The 5 Biggest Underwriting Mistakes Borrowers Make — And How to Avoid Them in 2026
⚡ Avoid These 5 Underwriting Mistakes to Get Approved Faster (Mortgage Tips for 2026 🏡)
⚡ The 5 Biggest Mistakes Borrowers Make During Underwriting (And How to Avoid Them)
When you apply for a mortgage, underwriting is the final gatekeeper between you and the closing table. And here’s the truth:
Most loans don’t get denied because of bad credit or low income —
❌ they get denied because borrowers make avoidable mistakes during underwriting.
As a mortgage broker at Medallion Funds, I see these mistakes every week. The good news?
If you know what to avoid, you can speed up approval, lower your stress, and position yourself as a stronger borrower.
Here are the 5 biggest underwriting mistakes — and how to avoid them like a pro.
1️⃣ Making Big Purchases Before Closing
This is easily the #1 underwriting killer.
Buying:
• A new car 🚗
• Furniture 🛋️
• Appliances
• Even opening a store credit card
…can instantly change your debt-to-income ratio, and underwriting will catch it.
How to Avoid It:
If it’s not essential to life or survival… don’t buy it until after closing.
Ask your lender before making any large purchase.
2️⃣ Depositing Large Amounts of Cash Without Documentation
Underwriters must verify the source of every large deposit.
Unexplained funds are a massive red flag.
How to Avoid It:
• Don’t use cash.
• Don’t move money between accounts unnecessarily.
• Send your lender screenshots or statements before you transfer funds.
If the money isn’t “paper-trailed,” it may not be usable for your loan.
3️⃣ Changing Jobs or Income Structure Mid-Process
Job changes = instability in the eyes of underwriting.
Even if you're getting a raise, switching from W-2 to 1099 or salary to commission can kill the deal.
How to Avoid It:
If possible, wait to change jobs until after closing.
If it’s unavoidable, call your lender before signing anything.
4️⃣ Ignoring Requests for Documentation
Underwriting is slow when borrowers respond slow.
The longer it takes to submit:
• updated paystubs
• bank statements
• explanation letters
• tax documents
…the longer your entire loan is delayed.
How to Avoid It:
• Respond within 24 hours.
• Upload clean, full documents (no screenshots missing pages).
• Ask your broker which documents to gather in advance.
Fast docs = fast approval.
5️⃣ Opening New Accounts or Applying for Credit During Underwriting
Underwriting pulls a soft credit refresh before closing.
If they see new inquiries or new accounts?
Your file goes back to review.
Your approval can be revoked.
Your rate can change.
Your closing can be delayed.
How to Avoid It:
This is simple: Do not touch your credit until you have keys in your hand.
Final Takeaway
Underwriting isn’t the enemy — it’s the process that protects both you and the lender.
If you avoid these 5 mistakes, you can:
✅ Get approved faster
✅ Protect your rate
✅ Reduce stress
✅ Close on time
✅ Strengthen your buying power
And if you want a smoother experience from start to finish, Medallion Funds is built to guide borrowers — buyers, investors, doctors, and self-employed professionals — through underwriting the right way.
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© 2023-2024 Bill Rapp, Medallion Funds LLC, Director of Capital Advisory
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Copyright ©2021 | Mortgage Viking Team
Licensed to Do Business | NMLS # 228246
This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply. Copyright © 2021 | Medallion Funds
Corporate | NMLS ID NMLS # 1825831
Corporate Address : 2651 N. Green Valley Pkwy STE. 101 Henderson, NV 89014
Corporate NMLS NMLS # 1825831 | Company Website: https://medallionfunds.com/bill-rapp/
Copyright ©2021 | Mortgage Viking Team Licensed to Do Business | NMLS # 228246
This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply
Corporate | NMLS ID NMLS # 1825831
Corporate Address : 2651 N. Green Valley Pkwy STE. 101 Henderson, NV 89014 https://medallionfunds.com/bill-rapp/