A mortgage is an important financial tool that individual borrowers can acquire to purchase a property. It’s also a potent tool that a company acquires to raise capital for expansion. There are some important aspects to follow and maintain to increase your chances of acquiring a loan on a mortgage. These could be anything from maintaining a good credit score to having sufficient funds and income. Borrowers often make some common errors while applying for a mortgage, which results in disapproval.

It is commonly either due to negligence or a lack of knowledge about mortgages that leads people to make these mistakes. Here we have listed the most common mistakes made when getting a mortgage so that you can avoid them:

• Missing bill payments
  Your eligibility for getting a mortgage depends largely on your credit score, and making timely bill payments helps maintain a healthy credit score. This includes credit card bills, mortgage loans, tax bills, and others. You must ensure that you don’t do anything that can potentially damage your credit score while applying for a mortgage.
• Purchase an automobile
  Buying a car too soon is one of the common mistakes made by many when getting a mortgage. Car loans involve monthly payments, and such newly-acquired debts cause a dent in your debt-to-income ratio. This, inadvertently, limits your chances of getting the loan, so take extra care before going for a trade-in and taking a loan.
• Making credit card purchases
  Items on sale can be tempting, tempting and often leading you to make the purchase without second thoughts. This impulsive behavior can prove harmful by reducing your FICO score and accumulating monthly debt liabilities. This, in turn, can cause severe damage to your mortgage approval.
• Listing your home for sale while refinancing
  Lenders will not approve a mortgage loan if the collateral is on the market. So, until the process of refinancing your home is complete, do not list it for sale. It’s advisable to wait until your loan application is closed to sell your property.
• Only getting a mortgage pre-qualification
  There’s a big difference between a mortgage pre-qualification and a mortgage pre-approval, and not understanding this difference is among the most common mistakes made when getting a mortgage. A mortgage pre-qualification is only a piece of paper and not a guarantee of approval. It’s often issued without performing much research and is only based on the information you provide to the lender. However, it is crucial to get a mortgage pre-approval as it comes to you after comprehensive research about your payments and other significant factors.
  Real estate agents demand a mortgage pre-approval before going any further as it improves the chances of the buyer securing the finance. However, this is absent in a mortgage pre-qualification.

Avoid making these common mistakes when getting a mortgage and do your homework to get a mortgage pre-approval as it keeps you in a good position to acquire the mortgage.