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There are many costly mistakes that you can make when applying for a mortgage. Below are just some of the biggest blunders to avoid.

Applying for a mortgage without preparing your finances

Before applying to any lender, you should make sure that you’ve sorted out your finances well in advance. Lenders will look at your bank statements over the last 6 months to determine if they can trust you. They will also run a credit check to see what your credit score looks like. If your finances are a mess and your credit score is low, it is likely you will be rejected.

You should start preparing for your first mortgage application a year or two in advance. If you have lots of existing debts, aim to pay off as many of these as you can or consolidate them into one debt. Make sure that your income is stable and avoid getting a new job six months before applying for a mortgage. If your credit score is low, consider looking into credit builder schemes.

Different mortgage lenders will have different requirements when making an application. Don’t apply to a mortgage if you do not think you are financially prepared enough for it – a mortgage application rejection will harm your credit score and could affect your ability to take out other mortgages. 

Ignoring interest rates

When applying for a mortgage, many of us are so preoccupied making sure that we can afford the deposit that we don’t consider the long term costs. Taking out a mortgage with high variable interest rates could make budgeting for repayments difficult and could be something you regret in the long run.

Fortunately, you can always remortgage if interest rates are too high. However, you can avoid paying high interest rates in the first place by making sure to compare interest fees while shopping around for mortgages. 

Not searching for specialist lenders

Regular mortgage lenders may not be willing to take on certain cases, however there could be specialist lenders out there that are. For example, if you’re buying a high value property, you may have a better chance of taking out high value mortgages with LDNFinance or another similar high value lender rather than applying to a conventional lender.

The same goes for cases such as self-builds, historic properties and coastal properties. There are also mortgage lenders that specialise in serving certain types of customers such as low income applicants, applicants over 50 and first-time buyers.

Using a bad broker

A good mortgage broker can help you to find the best mortgage deal by comparing hundreds of lenders. Such brokers may even have access to exclusive deals that you can’t find privately on the market.

Unfortunately, not all brokers will save you money. Some charge high fees and end up finding you a mortgage deal you could have found yourself. Always read reviews before choosing a broker and compare fees so that you don’t get ripped off. This mortgage broker guide at Really moving offers more tips on how to choose a reliable broker. 

Getting upsold unnecessary extras

Some mortgage lenders will offer great deals upfront, but will then try to hard sell you various extras that will push up the price considerably. This includes extras like MPPI, contents insurance and even life insurance.

Consider which extras you really need. If a mortgage lender refuses to offer you a mortgage without taking out certain extras, consider whether you’re better off looking for another lender.