Don’t ask for a mortgage if these things apply to you

There are certain scenarios where it pays to put a mortgage application on hold.

There are obvious advantages to owning a home over renting. Not only do you have the opportunity to own an asset that may grow in value over time, but you also have the ability to choose. You don’t have to follow the landlord’s rules or worry about whether your lease will be renewed.

But to buy a house, you’ll need a mortgage – unless, of course, you’re sitting on a massive pile of cash. And if these situations apply to you, it would be wise not to submit this home loan application.

1. You don’t know how much house you can afford

If you take on an overpriced mortgage, you risk falling behind not only on your mortgage payments, but your other monthly bills as well. If you aren’t sure how much mortgage you can afford, a mortgage calculator can help you break down your monthly costs based on your loan amount and interest rate. But even still, you’ll need a detailed budget to figure out what mortgage and monthly payment you can take, so don’t apply for a home loan until you’ve established those numbers.

2. Your credit is really bad

If your credit score is bad, you may not qualify for a mortgage in the first place. And if you are approved, you will likely be stuck with a higher interest rate which will make your monthly payments more expensive. Before you apply for a mortgage, work on increasing your credit. You should aim to get your score in the mid-600 or higher, although for the best rates available you will generally need a score in the mid-700 or higher. You can increase your credit score by paying all of your bills on time, eliminating some existing credit card debt, and correcting errors on your credit reports.

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3. You already have a lot of debt

Having a high debt-to-income ratio (your monthly debt to your income) could make it harder to get a home loan. But if you get approved and your debt load is too high, you risk falling behind on your various payments. And it could damage your credit and put you at risk of losing your home (if you fall behind on your mortgage itself). A better bet is to pay off some of the existing debt before applying for a mortgage. It could mean knocking out a personal loan balance or paying a credit card bill.

4. Your job is in jeopardy

If you have a job with a salary high enough to cover the mortgage you are applying for, then you can be approved without a problem. But if you have reason to believe that you may lose your job in the short term, it would be wise to put this application on hold until you have secured a more stable job. If you lose your job after getting a mortgage and fall behind on your payments, you risk losing your home, and it’s not a risk worth taking.

You should only get a “mortgage” when you are in “solid” “financial” shape. If any of the above scenarios apply to you, putting your home buying plans on hold could be a very smart move.


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