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Mistakes To Avoid After Applying For A Mortgage

Mistakes to Avoid After Applying for a Mortgage

Mistakes to Avoid After Applying for a Mortgage

At some point in our lives, we may have come across the infamous American play called “Death of a Salesman”. The common theme throughout the play is the struggles each character encounters when achieving their version of the “American Dream”. Just like the American Dream, the Canadian Dream means something different to every single person. For some it can be the abstract idea of success and what that means to them. For others, it can be a more tangible dream of being approved for a mortgage and owning a house. In Canada, one of the more common “Canadian Dreams” IS owning a home. When we finally reach the stage of applying for a mortgage, we can almost taste the success of reaching our version of the Canadian Dream. In this post, we talk a bit more about mistakes to avoid after you have applied for a mortgage. 

Avoid Big Purchases

After applying for a mortgage, we may feel the urge to drop some cash and make a big purchase. When we make a big purchase, like a new car or boat, we accumulate more debt. When we take on new debt, we have new obligations each month to pay it back. If we have a new payment that we are making every month, we may have to requalify for our mortgage. As we take on new debt, our debt-to-income ratio increases. A higher debt-to-income ratio means that we become a higher risk to a lender for a loan. This can even mean that a once qualified borrower no longer qualifies for a mortgage. 

So if you’ve got your eye set on a new Sea-Ray or sports car right after applying for a mortgage, be sure to check with your mortgage broker to determine if it’ll negatively impact your credit. While large purchases can be exciting, it’s important to remember that you have to be a little more careful during the mortgage approval process.  

Do NOT Quit or Change Jobs

As a borrower, your income needs to be traceable. This can be a bit challenging and unpredictable in the current market conditions. If you change jobs in the middle of applying for a mortgage, it makes it harder for your loan officer to track your income. The lender must be able to track your income and the amount you make annually. Lenders need an income that is reliable, stable, and prospective to continue for the next few years. If you are switching to a new job, the income should aim to be lateral or upward. Moreover, avoid switching to self-employed or commission-based in the middle of applying for a mortgage. This will really complicate your financial picture and make getting the best mortgage you can difficult. So if you’re looking to make a career change, it makes sense to do so after you get approved for a mortgage, no matter how badly you dislike your boss. 

Don’t Co-Sign for Other Borrowers

When you co-sign a loan with another borrower, you are added to their loan application and documents. This means that you are promising to take responsibility for that loan. Well, taking on too much responsibility (like your own mortgage and cosigning) can become detrimental. With co-signing a mortgage, you are subjected to higher debt-to-income ratios. Higher debt-to-income ratios mean you are seen as a higher risk to lenders. Even if you cross your heart and swear that you’re not the one responsible for making the payments, the lender will still tally those payments against you.

Just like the characters in “Death of a Salesman”, we encounter obstacles when reaching our Canadian Dream. But we tend to overcome the obstacles thrown at us and reach our goals. When reaching our goal of homeownership, talk to your local mortgage lender. At Clinton Wilkins Mortgage Team, we will help you avoid making a mistake after applying for a mortgage. If you’ve already found yourself in a little bit of a pickle, we can help you get out of it! Book a free consultation with us right here. 

1. The TeamClinton.ca “Fall Into Homeownership Giveaway” (the “Contest”) runs from 08:00:00 a.m. AST on September 6th, 2020 (the “Contest Starting Date”) to 5:00:00 p.m. AST on September 18th, 2020 (the “Contest Completion Date”). The Contest will have a series of prizes including:

  • One (1) daily prize draw for two (2) ticket vouchers for a future Halifax Wanders game (the “Daily Prize”) starting on September 8, 2020. The Daily Prize is valued at $65.00 CAD. There are no cash alternatives or substitutions.
  • Two (2) weekly prizes (the “Weekly Prize”) for a pair of season tickets with draws occurring on September 11, 2020, and September 18, 2020. Each Weekly Prize is valued at $450.
  • One (1) grand prize (the “Grand Prize'') that includes hotel accommodations, a restaurant gift card, and a Halifax Wanderers swag bag including two (2) game vouchers for a future Halifax Wanderers. The Grand Prize is valued at over $500.00 CAD. There are no cash alternatives or substitutions.

    2. Submitting this form implies consent to subscribe to our emails and mobile phone alerts. Subscribers may opt-out at any time. 

    3. SMS message and data rates may apply. Text HELP to 68411 for help, text STOP to 68411 to end. By opting in, I authorize the seller to deliver messages using an automatic telephone dialling system and I understand that I am not required to opt-in as a condition of entering the Contest.

    4. Participants will receive one (1) contest entry for signing up to email and/or mobile phone updates. This is limited to one entry per person through the online sign up form.

    5. Participants may have the opportunity to earn additional entries and any details will be announced from time to time if available.

    6. The Grand Prize is valued at $500.00 CAD. There are no cash alternatives or substitutions.

    7. Participants must be 18 years of age at the time of contest entry and reside in Nova Scotia, Canada.

    8. By entering this Contest, all entrants consent and agree to the use of their name, address, likeness and photo for any advertising, publicity and marketing purposes by the Sponsor, without compensation.

    9. By entering, all eligible participants agree to abide by the rules and conditions outlined above.

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