How to Avoid Common Mortgage Mistakes

Unknown Speaker

Hi Everyone, welcome back to another episode of the Reliant Mortgage Solutions Podcast. Today we are going to discuss the ten commandments for homebuyers and how to avoid some of the pitfalls that are all too common. James, I have seen this happen more than once: somebody is fully pre-approved on Monday, they buy a car on Saturday, and by the next week we're having a VERY different conversation.

James Eveld

The car on Saturday is the killer there. Because to that buyer, it's like, "Hey, I still make the same salary." But to underwriting, that new car payment is a brand-new monthly debt, right?

Unknown Speaker

Exactly. And that's the part people miss. A mortgage isn't approved in some vacuum. We're underwriting the financial picture you gave us at the start -- your income, your assets, your credit profile, your debts, your bank statements. If that picture changes between contract and closing, even in ways that feel ordinary, it can complicate the loan.

James Eveld

And "ordinary" is the dangerous word. Because none of these things feel dramatic in real life. Getting a new job can sound smart. Buying a washer and dryer can sound responsible. Helping your cousin by co-signing can sound generous. But during a mortgage process, those are not neutral moves.

Unknown Speaker

Right. They're not moral issues, they're timing issues. We call them the commandments or guardrails because they protect four big things: your credit score, your debt-to-income ratio, your cash reserves, and your closing timeline. That's really it. We're trying to keep the file stable long enough to get you to the table.

James Eveld

The phrase "debt-to-income ratio" is one buyers hear a lot. Let me try to say it back in plain English: if too much of your gross monthly income is already spoken for by car payments, loans, or credit cards, the house payment you can qualify for starts shrinking.

Unknown Speaker

That's it. And sometimes it shrinks fast. I mean, a single new obligation can change what you qualify for. Same thing with credit. You can have good income and still create problems if your score drops or your monthly obligations rise before closing.

James Eveld

So when you say stability, you really mean lenders are not just asking, "Can you afford this on paper?" They're asking, "Is the version of you who applied still the same version of you two weeks before closing?"

Unknown Speaker

That's a good way to put it. Yes. We like consistency. Same job, same bank accounts, same general spending habits, same documented funds. Boring is beautiful in mortgage lending. I know that's not exciting radio, but it's true.

James Eveld

"Boring is beautiful" might be the fact of the episode for me. Because buyers think the exciting part is the house hunt, but from contract to closing the winning strategy is... don't get creative.

Unknown Speaker

Don't get creative, don't get impulsive, and definitely don't assume no one will notice. Lenders verify. Underwriters review. And if something changes, we usually have to explain it, document it, or recalculate the file. Sometimes that's fixable. Sometimes it delays things. Sometimes it knocks a borrower out of qualification.

James Eveld

And that's the tension here. The mistake isn't always huge. It's just expensive at the wrong moment.

James Eveld

So let's hit the biggest landmines. The one I probably explain most to newer buyers is job changes. If somebody gets offered a better opportunity mid-process, they're thinking long-term. Why is that such a problem short-term?

Unknown Speaker

Because "better opportunity" and "easier to underwrite" are not always the same thing. If you change jobs, or worse, become self-employed during the loan process, you've changed one of the core pillars of the file. Income stability matters. Maybe the new job is fine eventually, but during an active mortgage, that shift can trigger extra review or stop the process cold.

James Eveld

The self-employed part is the one people underestimate. "I just started my own thing" sounds entrepreneurial. To underwriting, "just started" is the problem.

Unknown Speaker

Exactly. Then there are vehicles. The commandment says don't buy a car, truck, or van unless you plan to live in it. And that's funny because it's true. A new auto loan adds debt, often adds a credit inquiry, and can hit you twice -- on score and on ratio.

James Eveld

That "twice" matters. Not just the inquiry, not just the payment -- both. Same with furniture, appliances, big-box store financing, all that stuff buyers wanna line up before move-in.

Unknown Speaker

Yes, and furniture is a classic one. People think, "I'm being prepared." But if you buy furniture before closing, or really make any major purchase before closing, you may be using cash you needed for down payment and reserves while also creating new monthly debt. That's a rough combo.

James Eveld

Let me grab the cash side, because this one surprises people. If you've got money for your down payment, but it's cash saved at home -- safe, lockbox, under the mattress -- you generally can't just walk that to closing.

Unknown Speaker

Correct. Funds used in the transaction have to be sourced and verified. Undocumented cash is hard to use immediately. The practical fix is to deposit it EARLY and let it season in your bank account for about two months. That two-month seasoning window is huge. If you're planning ahead, do it now, not after you're under contract.

James Eveld

That "two months" is the sticky number. If you're hearing this and you've got five thousand, ten thousand, whatever it is sitting at home, the takeaway is not "great, I'll deposit it next week before closing." The takeaway is you're already late for that step.

Unknown Speaker

Right. And while we're on bank statements: don't make unexplained large deposits, and don't switch bank accounts in the middle of the process if you can avoid it. Large deposits create questions. New accounts create paper trails we now have to chase. Again, maybe explainable -- but now we're solving problems we didn't need.

James Eveld

It's funny, because from the outside a big deposit can look like good news. More money! But underwriting hears, "Where did this come from? Is it a loan? Is it a gift? Is it documented?"

Unknown Speaker

That's exactly the question. And here's another one people do out of kindness: co-signing for someone else. Maybe it's a child, sibling, friend. But if you co-sign, that debt can count against you. During a mortgage process, that can be enough to throw off your qualification.

James Eveld

The family-helping trap. It feels unrelated to your home purchase, but on paper it's absolutely related because your name is tied to the obligation.

Unknown Speaker

Now let's talk credit cards, because this is one of the fastest score changers. Buyers think, "I pay on time, so I'm fine." Not always. Maxed-out cards, or even just high balances, can drag down your score even if you never miss a payment. A good rule of thumb is to keep balances below 30% of the total limit.

James Eveld

Below 30% is the number to remember. So if a card has a one-thousand-dollar limit, running it at nine hundred isn't harmless just because you're current. That high utilization can still hurt you.

Unknown Speaker

Exactly. And the good news is paying down revolving debt can improve qualification surprisingly quickly in some cases. Better score, lower minimum payments, better purchasing power. So if someone asks me, "Should I open a new card for points while I'm buying a house?" the answer is no. No new accounts, no new inquiries, no games.

James Eveld

Save the travel points dream for after you get the keys.

Unknown Speaker

Please do. And if you've already got too much monthly debt, don't try to self-diagnose the fix. There are situations where a debt may be transferred or refinanced into another qualified person's name so the payment no longer counts against your ratios, but that's not a DIY move. Talk to your loan officer first.

James Eveld

That's an important distinction. Strategy is good. Surprises are bad. Because a lot of what we've talked about today -- job changes, car purchases, bank transfers, co-signing -- those are normal adult decisions. They're just not harmless inside a live mortgage file.

Unknown Speaker

That's really the heart of it. Small, everyday financial decisions can become very expensive mortgage mistakes if they happen at the wrong time. So if you're under contract and you're wondering, "Should I do this now or wait?" ... ask first. A two-minute phone call can save a closing date.

James Eveld

And that is a pretty good trade. Thank you all for listening to this episode of the Reliant Mortgage Solutions Podcast.