When applying for a refinance mortgage loan, you can’t let your guard down until the completion date has officially arrive. Even after you’re approved, there are still a number of mistakes that could threaten to derail the process.

Here are the seven things you should never do during the mortgage refinancing process. If you can avoid these common pitfalls, you should experience a smooth journey on your path to reaching your home loan goals.

7 No-No’s When Refinancing a Home Loan


1. Change Jobs/Employers Mid-Stream

Experiencing a major career change in the middle of the mortgage application process could definitely have an impact. Banks prefer to lend to people with stable, long tenure with their current employer. If you have dreams of going out on your own to start a new business or switching to another company, hold off until you’ve completed your mortgage.

2. Apply for Multiple Loans Concurrently

Don’t apply for any other type of loan at the same time you’re trying to refinance. Doing so could drastically affect your credit rating. If you can, put off your car shopping and auto loan application for a couple more months.

3. Miss Credit Card Payments, or Close a Credit Card

You never want to miss a credit card payment, but you really don’t want to do it in the middle of a home loan approval. Showing a high level of credit-worthiness and responsibility is critical during the mortgage approval process. Be extra careful with your credit cards during this time.

On a related note, you also don’t want to close out a credit card account right in the middle of a refinance. Credit scores tend to improve the longer a person holds the same credit account. Stability is key.

4. Make “Mattress Money” Deposits in Your Bank Account

When you refinance an existing home loan or purchase a first-time mortgage, banks want to see a three-month history of your account. Any large deposits other than your usual job income should be backed up with a clear paper trail. That can be easy if the money comes from the sale of property, but not so easy if you’re just taking mattress money and putting it in the bank for the first time.

5. Co-Sign on Someone Else’s Loan

This is not the time for you to be co-signing on a loan that someone else is taking out. As mentioned earlier, you want to avoid seeking approval for multiple loans at the same time because it risks hurting your credit rating. You even want to put off being a co-signer on somebody else’s loan.

6. Tell Some Little White Lies on Your Application

Don’t try to beef up your home loan application with false information. Your mortgage broker is simply trying to help you get the best loan possible. Giving them inaccurate info just makes it harder for them to do their job. If you’ve been through a bankruptcy, foreclosure, or another financial crisis, it’s always best to disclose this as early in the process as possible.

7. Marry Someone with Poor Credit

There are plenty of reasons why money is one of the top causes of breakups. If your spouse-to-be has a bad credit rating, it will impact you during the mortgage approval process. Have the talk about finances and make sure that there are no poor credit surprises to derail your refinance.