5 Things You Should Never Do When Getting A Mortgage

Your home loan is probably the most important financial investment that you'll make. So whether you're buying a new home or refinancing an existing mortgage, there are several things that could jeopardize the process and get you a worse deal in terms of fees and interest rates.

Don't make major purchases.

If you see a new home purchase or refinancing somewhere in the near future, don't go out and buy a car or washing machine on credit. This may significantly lower your credit score and put you in line for a more expensive home loan. Get the mortgage first, then the car.

Don't suddenly pay off your debts.

Unless you do it well before your mortgage application or unless your bills are overdue, abruptly paying off your debts won't really lower your credit score, but will lower your assets. So rather than getting a better mortgage, you end up with a more expensive mortgage and more limited options.

Don't decide on one type of mortgage too soon.

You may have fixed your mind on one type of mortgage, such as a fixed rate or an ARM with low payments. That might end up being the right loan for you, but talk with a loan officer or financial counselor about your short-term and long-term goals before finally deciding on a mortgage.

Don't lie on your mortgage application

Got someone trying to collect money from you? A court judgement? If you haven't included this on your loan application, the mortgage company will find out. The result: significant delays in getting your mortgage.

Don't apply for new credit cards in the months before you apply for a mortgage.

If you see a home purchase or refinance coming up in the future, don't apply for any new credit cards. Just applying for these credit cards could lower your credit score. While you're at it, cancel all the credit cards you're not using. You may not owe anything, but they affect your credit score.