Common mortgage mistakes are joy killers, aside from being deal enders. Many borrowers make the mistake of applying for a home loan without doing their homework first. Although you might have a general idea of how much you can afford to borrow and a good idea of your credit score, you aren’t really prepared to obtain financing. Before you even think about filling out a mortgage pre-qualification, you should know some key factors ahead of time.

Though you don’t hear about it in the local news or even the national news for that matter, plenty of would-be homeowner borrowers wind-up doing things which keep them from getting as much financing as they otherwise would; or, even stop them from qualifying at all. You can’t simply walk into a bank, speak with a loan officer, fill out a few forms, and obtain a home loan, but that’s how many people go about the process; and, it gets them into surprising and unpleasant situations.

What to Do before You Apply for a Home Loan

Prior to even browsing the internet for homes, you should know precisely where you stand financially. Your income is just one factor that goes in a mortgage approval and there are many others besides your credit score. Of course, your credit file is where you’ll begin. No matter how faithful you are about making timely credit card, car loan, student loan, and other payments, it’s highly likely that your report contains inaccuracies. Out of the hundreds of millions of credit files, 40 million contain mistakes and 20 million contain errors that are substantial enough to keep a person from qualifying.

“Did you know that mortgage rates can change multiple times throughout the day, similar to how stock prices fluctuate? They can and they do. But, more than half (55 percent) of the people polled thought rates were set one time each day. To get the optimum rate, it’s important to monitor rates and talk to different lenders. When you compare various rates make sure you are comparing the exact same loan.” —U.S. News and World Report

Get all three credit reports, you can do so free at AnnualCreditReport.com one per year, and go through every single line item. Dispute any mistakes and follow-up. At the same time, try to pay down as much debt as you can and put money aside for your down payment and closing costs. Your ideal goal is to get your debt-to-income ratio down to under 40 percent to under 35 percent. Your lender will be checking your financial health in more ways than one and you should be prepared. If you’re self-employed, you’re going to need a lot more than just bank statements, your credit reports, and proof of income.

The Biggest and Most Common Mortgage Mistakes Borrowers Make

Getting your financial affairs in order is a great place to start, but it isn’t the end of the process. There are plenty of ways to put your mortgage at-risk because lenders like one thing more than any other: low risk. Here are the most common ways people hurt their home loan approval and property closing:

• Taking on new debt prior to closing. You may want new furniture to go with your new home but if you take out a line of credit, charge it to a credit card you already have, or even pay cash, you’re incurring new debt which changes your debt-to-income ratio. Lenders run a second credit check just a couple to few days before closing; what’s more, they also check your bank account balance, so, even paying cash will get noticed.
• Changing jobs or careers. You should be at your current position for at least three years and if you change jobs prior to closing, you’re endangering your chances of the mortgage actually being going through.
• Exaggerating their income. This is not only unethical, it’s a federal offense. In addition to those factors, any income exaggeration has a high probability of being discovered and you won’t get the home loan.
• Omitting information on their application. Some applicants try to hide things from lenders, like a judgment against them or an estranged spouse. That’s a bad idea and one that won’t go unnoticed.
• Skipping the home inspection. Some buyer skip the home inspection because the house is newly built or they don’t want to delay the process. This is just asking for buyer’s remorse. If something is wrong and you find out about it right before closing, you’re likely to become familiar with a legal term called “specific performance.”

The bottom line is, if you do something that makes you appear to be more of a risk, you’ll hurt your chances of buying a home.