In today's competitive housing market, getting your mortgage application right the first time isn't just helpful—it's essential. Let's cut through the noise and get straight to the mistakes you need to avoid.
1. Playing fast and loose with the truth
Look, we get it. That side hustle income might be inconsistent, or maybe last year's earnings weren't your best. But here's the brutal truth: lenders can and will verify everything.
Modern lenders have sophisticated verification systems that will cross-reference your:
- Income statements
- Bank transactions
- Tax returns
- Employment history
When they catch discrepancies (and they will), your application doesn't just get delayed—it often gets rejected outright. This will certainly be the case if you doctor documents, even if your intentions are pure. Worse, it leaves a mark on your credit history that other lenders can see.
The Fix: Document everything honestly. If your financial situation isn't ideal, let's talk about it upfront and build a strategy to strengthen your application over time.
2. The multiple application approach
Applying to six different lenders hoping one will stick isn't just ineffective—it's actively harmful. Each application triggers a hard credit inquiry, and multiple inquiries in a short period make you look desperate to lenders.
Those credit inquiries can:
- Drop your credit score by up to 10 points each
- Stay on your credit report for two years
- Signal to lenders that you've been rejected elsewhere
The Fix: Work with a broker (hey, that's us!) who can match you with the right lender the first time, saving your credit score and improving your chances.
3. Ignoring your credit health
Your credit history isn't just a number—it's the story of your financial life. Many applicants are shocked when past mistakes they've forgotten about resurface during the application process.
Common credit surprises include:
- That phone bill you disputed three years ago
- The credit card you forgot to close properly
- Authorized user accounts on an ex's credit card
- Identity theft you never knew about
The Fix: Pull your full credit report at least six months before applying. This gives you time to dispute errors, pay down balances, and build a stronger credit profile.
4. House hunting without pre-approval
Walking into the mortgage process blind is like showing up to a marathon without training. Many applicants don't realise that pre-approval isn't just a formality—it's your competitive edge in a hot market.
Without pre-approval:
- Sellers won't take your offers seriously
- You'll waste time looking at properties you can't afford
- You'll miss opportunities while scrambling to get financing in order
The Fix: Get pre-approved before you even open that real estate app. We can help you understand exactly what you qualify for so you can house-hunt with confidence.
5. Underestimating the true cost of homeownership
The sticker price of a home is just the beginning. Many first-time buyers focus solely on the mortgage amount while overlooking the numerous additional costs.
Beyond your mortgage payment, you'll need to budget for:
- Stamp duty (which can add tens of thousands to your purchase)
- Lender's Mortgage Insurance if your deposit is under 20%
- Building and pest inspections
- Conveyancing and legal fees
- Moving costs
- Ongoing property taxes and insurance
- Maintenance and repairs
The Fix: Work with us to create a comprehensive budget that accounts for all homeownership costs, not just the mortgage payment.
6. Making major financial changes mid-application
That new car might seem like a great idea, but financing it while your mortgage application is being processed can derail everything. Lenders get nervous when they see significant changes to your financial situation.
Actions that raise red flags include:
- Changing jobs or employment status
- Opening new credit accounts
- Making large deposits or withdrawals
- Increasing credit card balances
- Cosigning loans for others
The Fix: Maintain financial stability during the application process. Save major purchases and career moves for after you've closed on your home.
7. Going it alone without a mortgage broker
The mortgage landscape changes constantly, with shifting interest rates, lending criteria, and government incentives like the First Home Owner's Grant. Trying to navigate this complex terrain solo often leads to missed opportunities and costly mistakes.
Without expert guidance, you might miss:
- Lender-specific programs for your profession
- Alternative loan structures that could save thousands
- Government incentives and grants
- Negotiation opportunities on fees and rates
The Fix: Partner with Forward Mortgage Solutions. We stay on top of industry changes so you don't have to, and we'll advocate for you throughout the process.
The bottom line
Securing your dream home doesn't have to be a nightmare. By avoiding these common mistakes and working with a broker who understands your unique situation, you can approach the mortgage process with confidence.
Ready to get started? Book a no-obligation consultation with our team today. We'll help you create a personalized roadmap to homeownership that works for your real life—not just on paper.
