5 Mortgage Mistakes to Avoid

April 15, 2026

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What we'll cover:

Mistake 1: Not checking your credit score or credit report.
Mistake 2: Not shopping around for the best rates.
Mistake 3: Changing your job or income in the middle of your application process.
Mistake 4: Making large purchases and applying for additional credit near the time of your application.
Mistake 5: Not considering closing costs.

When applying for a mortgage, it’s important to be thorough, especially if you’re a first-time homebuyer.

And for those who have gone through the process before, it may be tempting to go with what you know and stick with your previous or current lender. Without shopping around, however, you could miss out on better offers.

In this article, we’ll take a look at some of the common mistakes when navigating the mortgage process and go over a few tips that could help you avoid them because even small missteps can be costly.

Mistake #1: Assuming you know your credit score and credit history

When you’re applying for a loan, lenders use credit scores and credit reports to help assess your overall creditworthiness. In other words, will this borrower be able to pay us back?

Many of us probably have a general sense of where we stand, but it’s a good idea to review our credit history and see what’s in our credit report before applying for a mortgage.

Here's a few reasons why:

Credit scores can change from month to month, depending on a number of factors like payment history, outstanding balances, credit utilization, etc.

You can request a free credit score report from each of the main credit bureaus every 12 months – Equifax, Experian, and TransUnion.

It could help you know what to expect when you apply for your loan. Generally, the higher your credit score, the better your interest rate offers.
It gives you an opportunity to correct any errors and identify potential fraud. Errors on your credit report can impact your mortgage interest rate and chances of approval.

Pro tip: By law, you can order a free copy of your credit report from all three major credit bureaus (e.g., Experian, TransUnion, Equifax) once every 12 months. Visit annualcreditreport.com for more information. This is the official website authorized by the federal government, where you can request your free credit reports.

You usually won't find your credit score on a credit report. But there are several ways to get it.

You can get your score through the three national credit bureaus.
You can also get it directly from a credit score provider like FICO.
Your bank or credit card company may be an option, too.

Visit consumerfinance.gov for more information.

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Mistake #2: Going with what you’re familiar with

When navigating a complex decision, it can be easy to go with what we know. If you’ve worked with a lender before, don’t assume your previous or current lender will offer the best deal. You should shop around before committing to one. Each lender may offer different rates and charge different fees, so it’s smart to compare your options.

Mistake #3: Changing your job or income during the mortgage process

Changing your job or income during the mortgage process could slow down your application. Lenders look for job stability and consistent income when assessing your ability to repay a loan, so any major or sudden changes could be seen as a potential risk.

A job change, especially to a new industry or a position with a different income structure, can slow down the verification process, leading to delays or even loan denial. To help avoid these issues, it’s usually better to wait until you’ve been approved before making any big changes to your employment or income status.

If a job change is unavoidable, be sure to communicate with your lender as soon as possible to discuss the potential impact on your application.

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Mistake #4: Making big purchases, applying for additional credit

When you’re in the middle of a mortgage application, it’s a good idea to avoid making major purchases or applying for additional credit. Any big changes to your credit score or debt levels can impact your ability to secure a mortgage with favorable terms.

For instance, buying a new car or opening new credit cards can increase your debt-to-income ratio, making you appear riskier to lenders. This can lead to higher interest rates or even a denial of your mortgage application.

Also, keep in mind that applying for new lines of credit (e.g., credit cards) could temporarily lower your overall credit score because the applications often trigger hard inquiries into your credit. And these hard inquiries could lead to a drop in your credit score, which is not great when you’re shopping for a mortgage.

Mistake #5: Not considering closing costs

First-time homebuyers often forget to factor in closing costs. These fees, which can range from 2% to 5% of the loan amount, cover a variety of expenses, including:

Loan application or origination fees
Appraisal and inspection costs
Title insurance
Attorney fees.

It’s important to be aware of and plan for these costs. Otherwise, they could lead to an unpleasant surprise at the closing table, potentially straining your budget

This article is for informational purposes only and is not a substitute for individualized professional advice. Articles on this website were commissioned and approved by Marcus by Goldman Sachs®, but may not reflect the institutional opinions of The Goldman Sachs Group, Inc., Goldman Sachs Bank USA, Goldman Sachs & Co. LLC or any of their affiliates, subsidiaries or divisions. Information and opinions expressed in this article are as of the date of this material only and subject to change without notice. You are not permitted to publish, transmit, or otherwise reproduce this information, in whole or in part, in any format without the express written consent of Goldman Sachs. This foregoing restriction includes, without limitation, using, extracting, downloading or retrieving this information, in whole or in part, to train or finetune a machine learning or artificial intelligence system.