7 credit mistakes that kill Jacksonville mortgages

Most mortgage files don't fail at application. They fail mid-process, when a buyer makes an unforced credit error between pre-approval and close. Here are the seven we see most often in Jacksonville. Each has cost a real buyer their close.

1. Opening new credit between pre-approval and close

Don't apply for a new credit card, store card, or auto loan once your mortgage is in process. Every new account dings your score (per FICO's guide to new credit) and changes your DTI. Underwriters re-pull credit before close; a new account that wasn't there at application can blow up the file.

Wait until after closing to apply for anything new.

2. Closing old credit accounts to "clean up"

Counterintuitive: closing an old credit card can hurt your score. It raises your utilization ratio, because your total available credit drops while your balances stay the same. Amounts owed, which includes utilization, make up 30% of a FICO score (per FICO's score breakdown).

Leave old accounts open. Especially the oldest one.

3. Running balances up on existing cards

Your credit-card balances on the next statement after pre-approval matter. If a card was at 10% utilization at application and you charge it to 80% before close, your score drops and your DTI ticks up.

Keep balances low through close. Pay them down BEFORE applying if they're high.

4. Letting any payment go late

Even one 30-day late on any account during the loan process can drop your score. Mortgage, car, credit card, student loan, all of them. Late payments also flag the underwriter for "willingness to pay" review.

Auto-pay everything. Set minimums on autopay so a missed reminder doesn't kill the file.

5. Co-signing for someone else mid-process

Co-signing for a child's car loan, a sibling's apartment, anything, adds the debt to YOUR DTI. Even if you don't make the payments, lenders count it against you, per Fannie Mae's debt rules.

Decline co-signing requests until after closing.

6. Paying off old collections without coordinating

Counterintuitive #2: paying off an old collection does not erase it from your credit report, so it may not help your score the way you expect. Sometimes it is worth paying before closing, sometimes after. It depends on the program, so ask us before you pay.

Ask us first. We'll tell you whether to pay it now or wait.

7. Buying a car right before closing

The single most common file-killer in Jacksonville. New car payment = $400-800 added to your monthly debt = DTI re-calculation = file may no longer qualify. We've watched buyers lose their dream home over a Tahoe purchased two weeks before close.

Wait until after closing. The same applies to any major recurring debt: boat loans, RV loans, financed appliances, financed furniture.

What to do instead

• Pay down credit-card balances before application (improves score and DTI)
• Pull your credit report so you see what underwriting sees
• Tell us about anything weird (medical collections, identity-theft disputes, an old judgment) at application. Surprises mid-process are the problem
• Auto-pay everything for the duration of the file

We coach you through this

We tell every Jacksonville file at application what NOT to do during the process. Most of these mistakes happen because no one warned the buyer.

Start your Jacksonville file with full coaching →

Cross-references:

• First-time homebuyer guide
• What documents you need to refinance
• Loan programs at a glance