Top 5 Mortgage Mistakes That Cause Delays and How to Avoid Them

For many, buying a house is one of the biggest and most important financial decisions that can be made, and so it’s natural to feel anxious about securing the right mortgage.

What are the mortgage application pitfalls? What will delay my application? Why is my mortgage application taking so long?

Whether you’re a first-time buyer or an experienced property landlord, there can often be a hundred questions on your mind and it’s perfectly normal to be worried about any mortgage application mistakes that could hinder your mortgage success.

In this article, we explore the top 5 common mistakes on mortgage applications that can cause delays, showing you the best methods to avoid them to ensure your application is sent off without a hitch. Let’s jump in.

1. Missing or Out-of-Date Mortgage Documents

One of the most common reasons a mortgage application is delayed will be down to missing or out-of-date paperwork. Lenders will need to verify your identity, income, and financial stability before approving your loan. As a result, if even a single document is missing or out-of-date, your mortgage application will likely be paused until the new and relevant evidence is accurately provided.

While it may seem to be an easy task, many mortgage problems and their solutions start with basic preparation. Before applying for your mortgage, it is important to understand the documentation that will be required. Gather recent payslips, bank statements, proof of address, and identification, and importantly, double-checking the issue dates on all of these documents – can help you save time in the future.

Most notably, should a mortgage underwriter keep asking for more documentation, the reason will often be because what has already been submitted does not fully meet their verification requirements.

While every lender will have their own checklist, most will ask for the same core documents. These will all need to be verified before your mortgage application can move forward.

Working with a trusted mortgage broker – like Boon Brokers – can help you ensure everything is correct before submission. Our dedicated mortgage advisers can guide you through the entire submission process, helping you understand exactly what your chosen lender will expect before you apply.

In short: being proactive and organising all of your documentation can save weeks of back-and-forth with lenders. It’s one of the easiest ways to make your application move faster – and can help your broker present a complete and accurate picture of your financial standing to your chosen lender.

2. Changing Jobs or Income During the Mortgage Process

Changing jobs or income during a mortgage application can delay approval because lenders  will need to reassess your financial stability and affordability. Ultimately, any change in your financial stability or circumstances will lead to a reassessment to ensure that you are still able to comfortably afford the repayments of your agreed mortgage.

What Happens If I change Jobs During A Mortgage Application?

The answer is rather simple. While it does not necessarily mean that your application will instantly be refused, it does mean that there will often need to be a reassessment with updated paperwork to support your new financial standing.

This is because lenders rely on evidence of consistent income when calculating how much you can borrow. Any change to this consistency or income amount, for example should you change jobs during the mortgage application, then you’ll likely need to submit a new employment contract, fresh payslips, or confirmation from your employer that your role is permanent.

In most cases, however, your lender will simply request updated documents. While this can extend the processing time of your application, with good communication, it doesn’t have to derail your plans.

It is important to note that some lenders may choose on their reassessment to pause the application process, until you’ve passed a probation period.

What If I Get a Pay Rise with My New Job?

From a lender’s point of view, even a pay rise can temporarily complicate things. They’ll want to ensure your new income is sustainable and verified before final approval. If your status has changed from employed to self-employed, then applicants may face additional hurdles as lenders usually require at least one full financial year under the same trading name or business for self-employed workers.

At Boon Brokers, our fee-free advisers can review your situation, explain how lenders might respond to your employment change, and help you prepare the right documents in advance. With our guidance, you can avoid any unnecessary setbacks and keep your mortgage application on track.

3. Unexplained Large Bank Transfers or Cash Gifts

Unexplained bank transfers are like warning lights for lenders, as they must comply with strict anti-money-laundering regulations. If you’ve received a cash deposit for mortgage purposes, you’ll need to provide evidence of where it came from and confirm whether it was a gift or a loan.

During the assessment of your mortgage application, lenders will review your recent bank statements. In the scenario that they spot an irregular or large cash deposit that lacks explanation, they’ll request for proof of its source.

Evidence can be a sale receipt or a formal declaration of a gifted deposit for mortgage. However, without this evidence, your mortgage application will likely be paused until the information is confirmed, and potentially rejected without qualifying evidence.

Can My Parents Help with My Mortgage?

Even in the scenario that your parents help support your mortgage with a cash gift for a mortgage deposit, the transaction needs to be documented correctly. Most lenders will require a signed gift letter stating the money is not a loan and that the giver has no ownership claim over the property.

If you’re planning on using a cash gift in your mortgage application, then working with a trusted mortgage broker can make sure this does not affect your mortgage application.

Our dedicated mortgage advisers can explore what documentation your chosen lender requires, help you prepare a proper gift letter, and ensure your mortgage application is not delayed. At Boon Brokers, we ensure that you can take advantage of family help confidently, knowing everything is fully compliant and transparent for the lender’s assessment.

4. Taking Out New Credit or Finance Before Completion

Taking on new credit or finance during a mortgage application will likely slow down, and can even jeopardise your mortgage approval entirely. This is because lenders calculate affordability based on your current debts and financial commitments. Should you take out a new credit card, personal loan, or finance deal, it will ultimately change your total debt-to-income ratio and trigger an additional credit check and re-assessment of your application.

Many people can underestimate how seriously lenders view new financial commitments, and even if you’re confident in your ability to manage new borrowing, lenders will still need to assess any recent credit activity.

How Many Credit Checks Happen During a Mortgage Application?

When a mortgage application is submitted, most lenders will perform an initial check during the decision-in-principle stage and a second one before the release of funds. Naturally, any major financial activity between these stages can raise concerns.

It’s important to note that with each mortgage application, a new credit enquiry will be generated, which can signal increased financial risk. Multiple mortgage applications or credit enquiries within a short period is likely to cause lenders to pause your application or request for additional proof of affordability.

Can I Use My Credit Card During a Mortgage Application?

While technically, it is completely safe to use your credit card during a mortgage application, the best and safest advice is to hold off until your mortgage completes. Even small balances or new transactions could affect your credit score, trigger additional checks, and potentially delay your mortgage approval.

Understanding how lenders track credit enquiries is key to avoiding unnecessary delays and keeping your mortgage application on track. At Boon Brokers, our dedicated mortgage experts can guide you through how credit checks work, how they’re assessed by lenders, and how your credit score can influence the outcome of your mortgage application.

5. Letting Your Credit Score Slip During the Application

Your credit score can be one of the most influential factors in any mortgage decision. Even small changes – such as missed payments or high card balances – can cause your application to stall.

As we’ve explored above in our section on Taking Out New Credit – lenders will review your credit score to assess your risk as a borrower and determine your affordability. A change in your credit score could affect the interest rates that you’re offered to the amount you are approved to borrow.

Being proactive and disciplined during the mortgage process is essential. Below, we have created an overview table of the key ways you can protect your credit score:

Work with a Mortgage Broker to Avoid Delays

It’s no secret that applying for a mortgage can feel overwhelming. Keeping track of everything on the lender’s checklist, from missing documents and unexpected credit checks to changes in employment, can quickly become confusing and stressful. But working with a trusted mortgage broker can help streamline your mortgage application and avoid delays.

At Boon Brokers, our fee-free mortgage advisers can provide you with whole-of-market access and personalised guidance. We will compare mortgage deals across the market, from popular high-street banks to specialist lenders, to find the mortgage that best matches your needs.

Our expert advisers will support you every step of the way, ensuring all paperwork is complete, advising on rates, guiding you through lender requirements, and helping you avoid common pitfalls in the mortgage application process. By identifying potential issues early, we can provide practical mortgage problems and solutions before they impact your application.

Contact Boon Brokers today to speak with an expert adviser who can help ensure your mortgage application proceeds smoothly from start to finish.