🔥 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