3 More Mistakes to Avoid When Applying for a Mortgage

Video Transcript

If you're thinking about buying a house, here are three more mistakes that you should avoid before applying for a mortgage.

Mistake Number One: Co-Signing a Loan for a Friend or Family Member
Now I would say personally that co-signing any loan is probably not a great idea, even under the best of circumstances. But you definitely want to avoid co-signing any loan while applying for a mortgage. Co-signing basically means that you'll be on the hook if the main borrower just decides that they're not going to make their payments. The lender is not going to be a fan of you taking on this big of a responsibility.

Mistake Number Two: Changing Bank Accounts
Now there are many great reasons and situations when opening a new bank account is a good idea, in the middle of applying for a mortgage is not one of those situations. So, you're just going to want to maintain a consistent financial life until your loan is funded.

Mistake Number Three: Borrowing Money From a Friend or Family Member
A large deposit into your bank account can raise some red flags. Your bank is probably going to want to require some additional information from you just to explain where this money is coming from. So, to make things easy on yourself avoid this situation if you can.