Applying for a mortgage is an exciting milestone, and waiting to be approved can be stressful. There are some common mistakes that many homebuyers make during this time, and knowing in advance what they are can save you from being denied by a lender. Here are our top 5 worst mistakes you can make when applying for a home loan:

Big Purchases and Credit

Congratulations, you’re about to purchase a new home! You have applied for a mortgage and are excitedly waiting to be approved. You’re probably dreaming up decorating ideas and building a new furniture wishlist, but you should leave that new sofa in the cart for now. Overspending, applying for new credit, or using existing credit at this time could affect your debt to income ratio, which is used to determine whether you’ll get the loan. Large purchases can be a red flag to a lender when you are trying to make such a large investment in a home at the same time. If you make enough drastic changes to your portfolio and your credit, you may no longer qualify for the mortgage you wanted. Try to save any appliance or furniture purchases, moving costs, landscaping planning, and other unusual spending for after your closing day. 

Making Large Cash Deposits

Before you make any large deposits, make sure you discuss it with your loan officer. This is because cash is harder to trace, and lenders need to be able to source the money for the deal. Moving sums of money around like this can confuse the process.

Moving Money Around

Keep your bank accounts consistent during the approval process. If you need to change banks or make large transfers of money, it’s best to wait until after you are approved, or speak with your loan officer before doing so. Keep your accounts open- this applies to credit cards, as well. Adjusting your finances can affect your debt to income ratio and credit utilization, and- you guessed it- should not happen until after you are approved. Consistency is the name of the game, and you want your accounts to be as old as possible and with a good, consistent payment history.


If you decide to co-sign on a loan with someone else, even as a way to help them out, this could be detrimental to your mortgage loan approval odds. You need to have your full credit utilization available to you, and opening a new loan too close to your mortgage application, even if you aren’t making payments on it, can cause lenders to deny you another loan. 

Lack of Transparency

Sometimes, transparency about finances can be uncomfortable, but no secrets! The most important thing you can do through the home buying process is to have a realtor that you trust to help you make sure none of these mistakes are made. If you are open and consult with them about your financial circumstances and goals, they can educate you about the process and guide you to the best possible outcome. If you are ready to start your journey towards buying a new home, the experts at Zimmer Real Estate Group are here for you! Contact Us today to get started.