The Errors That Keep Showing Up and That Are All Completely Preventable

After years of helping families buy their first home Andrea Kling has seen the same mistakes repeat themselves over and over. The good news is that every single one of them is avoidable if you know what to watch for from the beginning. Here are the six most common ones.

Mistake 1: Making Large Purchases Before Closing

Buying a new car, financing furniture, or opening a new credit card right before or during the home buying process can affect your debt-to-income ratio and put your final loan approval at risk. Underwriters review your finances not only at the beginning of the process but also close to closing and any significant change can generate questions or delays.

The golden rule is simple. Do not make large credit purchases until after closing. Once you have the keys in hand you can buy whatever you need.

Mistake 2: Changing Jobs in the Middle of the Process

A job change even to a higher-paying position can complicate the verification of your income right when the underwriter is reviewing your application. Lenders want to see stability in your employment and income situation. A job change mid-process can require additional documentation and in some cases can significantly delay closing.

If possible avoid job changes while your loan is in process. If the change is unavoidable talk to your loan officer first to understand how to handle it correctly before it becomes a problem.

Mistake 3: Not Reviewing Your Credit Early Enough

Many buyers discover errors on their credit report in the middle of the buying process when it is already too late to fix them calmly. An error on your report can be suppressing your score without you knowing it and correcting it can take weeks or months to resolve.

Reviewing your credit several months before you plan to buy gives you time to identify errors, dispute them properly, and improve your score if necessary before the formal process begins.

Mistake 4: Looking at Homes Before Getting Pre-Approved

Falling in love with a home before knowing how much you can actually qualify for leads to unnecessary disappointment. It is very easy to fall in love with a property that is outside your budget or to limit yourself to a lower range than you actually qualify for. Without a pre-approval letter many offers are not even taken seriously in competitive markets like the DC, Maryland, and Virginia area.

Pre-approval is the first step not the second.

Mistake 5: Moving Large Amounts of Money Between Accounts Without Documentation

Underwriters need to be able to trace the origin of all the funds you plan to use for the down payment and closing costs. Moving money between accounts, receiving large cash deposits, or unexplained transfers can generate questions and delays while additional documentation is requested to explain each movement.

If you are going to receive money from a family member as a gift talk to your loan officer first so it can be documented correctly from the beginning rather than becoming an issue during underwriting.

Mistake 6: Focusing Only on the Interest Rate

The interest rate matters but it is not the only factor that determines the total cost of your loan. Closing costs, the type of loan program you use, mortgage insurance, and the specific terms of the loan also affect how much you actually pay over the years. A loan with a slightly lower rate can end up costing you more if it carries higher fees or a mortgage insurance structure that does not cancel.

It is important to look at the complete picture rather than just the rate number.

How to Avoid These Mistakes

The best way to avoid these pitfalls is to have an early conversation with your loan officer even before you start looking at homes. That conversation allows you to plan ahead, prepare your documentation correctly, and avoid last-minute surprises that put your closing at risk.

Have questions about any of these points in your specific situation? Reach out to Andrea Kling and work through it together before you start your home search.

Sources

ConsumerFinancialProtectionBureau.gov
MortgageNewsDaily.com
MyFICO.com
FannieMae.com
Investopedia.com