5 Common Mortgage Application Mistakes to Avoid

Posted on 5th June 2023

Applying for a mortgage can be quite an overwhelming, time-consuming, and even frightening process, particularly for first-time home buyers.

Considering all that is involved in the application process, such as gathering important documents and paperwork, meeting regularly with potential lenders, and everything else in between, it can be easy to slip up and make mistakes that may potentially hinder your chances of getting approved. Such errors can even cost you considerably more than is necessary in the long run.

With that being said, being aware of the common mistakes that are easy to make during a mortgage application can help you better navigate this complex process with more confidence and ease. Such knowledge can also boost your chances of obtaining the most attractive mortgage rates and terms available to you and your family.

In this article, we will uncover five of the most common mortgage application mistakes that homeowners-to-be tend to make. Additionally, we will provide tips on how you can avoid making these errors, too.

Mistake Number One: Dodging the Pre-approval Letter

As a homeowner-to-be, you will want to ensure that you secure a mortgage pre-approval letter prior to beginning your mortgage application process. This pre-approval form will grant you the opportunity to discover just how much money you can get approved for, which will allow you to focus only on the homes you can truly afford during your search. In addition to this, it can also play a role in helping to speed up the process during your final mortgage approval.

Moreover, receiving a pre-approval letter before starting your mortgage application process will give you an advantage over other buyers, as sellers will view you as a more qualified and competent buyer than others without a pre-approval letter to present.

Mistake Number Two: Being in the Dark About Your Down Payment Options

It is essential to know about your various down payment options prior to applying for a mortgage for several different reasons. These reasons include that it will help you determine affordability, allow you to budget for additional expenses, and ensure that you can meet the requirements set into place by your lender (thus increasing your chance of approval).

Lastly, it will also help you identify another way you can save money over your mortgage loan.

Mistake Number Three: Failing to Have All of Your Documents Ready (and Not Ensuring That All Information Is Accurate)

Your lender will require a lot of information from you to determine whether you are eligible for an approved mortgage. Therefore, you should be as cooperative as possible and have all the correct paperwork and documents ready for presentation, which should all be accurate, detailed, legible, and fully complete.

Without all of this necessary paperwork filled to completion, a reputable lender will not be able to successfully process your mortgage loan, or at least process it in a timely manner, as they will be waiting on you to finally provide all the information that they need.

Moreover, including any errors in these documents may also harm your chances of receiving a mortgage approval, as false or misleading information (or withholding certain details) can be considered fraudulent.

Mistake Number Four: Failing to Check Your Credit Score Beforehand

As you are likely already aware, your credit score is a critical component of the mortgage approval process. In order to ensure that the odds are in your favour for an approval, in addition to securing a low interest rate, you will need to ensure that your credit score is above the minimum number required (and ideally on the higher side).

If your credit score could use some improvement, then it is best to put off your mortgage application until you can boost it up to a more attractive score.

Mistake Number Five: Neglecting to Read the Fine Print

Reading the fine print while applying for a mortgage is the best way to ensure that you have a complete understanding of the loan’s terms and conditions (including the interest rate, fees, and repayment period). Make sure that your lender is trustworthy, has a good reputation and allows you to avoid potentially costly hidden fees or charges.

Moreover, it is critical that you read the fine print to become fully aware of your exclusive rights and responsibilities as a borrower, as knowing this information will help you to steer clear of any possible future financial or legal troubles.

Let Our Team of Experts at Canadalend Help You Obtain the Right Mortgage in Toronto and Beyond

When you choose an expert from our team of experienced and reputable private lenders in Ontario, you can rest assured that we will be with you every step of the way in securing the right mortgage for you.

To learn more about our private mortgage solutions in Toronto, as well as our financing options, call Canadalend.com at 1-866-I CAN LEND, or you can contact us here.

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