Buying a home is an exciting process. But the mortgage application part? Not so much. Many first-time buyers get utterly stressed and confused having to navigate all the requirements, fees and conditions. Good preparation is key - making certain blunders during the application process could potentially lead to it being rejected, preventing you from buying a home. What are some of the biggest mistakes to avoid when applying for a mortgage? This post explores 7 examples.

Lenders love stability. While getting a new job could potentially unlock a higher income, which could look more attractive to a lender, you ideally want to be settled into this new job at least six months before applying for a mortgage. Switching to a new employer shortly before applying might suggest that you don’t have a predictable income and that there’s no guarantee you’ll be able to keep up with repayments.

The solution? Delay getting a new job until your mortgage application is completed. Alternatively, if a career opportunity has come along that you can’t miss, wait six months after this job has begun to start applying. Switching to a similar role at a different company will usually suggest more stability than a complete career change, so bear this in mind.

The worst time to fall into arrears is when applying for a mortgage. Lenders will check your bank statements when you apply. A single missed payment on anything could put off a lender, as it could suggest you’re likely to miss a mortgage repayment. Missed payments will harm your credit score, which is also considered by lenders.

Aim to keep on top of all payments within the six months leading up to your application. Set bill reminders so that you always have enough money in your account, and keep you spending low so that you don’t accidentally go overboard. Watch out for surprise annual payments or adjusted payment dates due to national holidays.

You should avoid taking out any new loans shortly before or during the mortgage application process. A new car loan or furniture finance scheme will increase your debt-to-income ratio, which could be a red flag to lenders. New credit cards, BNPL schemes and personal loans can be particularly risky, as they might suggest that you are already living beyond your means, and that a mortgage might therefore be too much of an extra commitment.

Of course, everyone has to borrow money for things now and again, and there’s nothing to stop you taking out extra debts once your mortgage application has been completed (having a mortgage may actually make you more attractive to lenders). However, you should try to avoid taking on any new debts six months before applying for a mortgage. Aim to be as frugal as possible so that you don’t have to borrow for anything, and wait until you’ve bought your new home to go furniture shopping.

A lot of people only look at their credit report after they’ve already been rejected by a lender - but by then, the damage is done. Lenders use your credit report to assess whether to approve you, how much to lend you and how much interest to charge you. It’s important that you check your report in advance so that you can spot any problems early and improve your position before applying.

This includes disputing errors on your credit reports if you find anything incorrect such as a name or address that hasn’t been updated. You should check your report with at least one major credit reference agency. If you see anything that doesn’t look right, follow the agency’s process to raise a query or complaint.

Many first-time buyers focus exclusively on saving a deposit. That is a great start - but it’s only part of the total cost of buying a home. You also need to have money set aside for conveyancing fees, valuation fees, mortgage arrangement fees, taxes, moving cost and initial repairs. If you don't already rent somewhere, you’ll also need to consider the added cost of utilities and home bills.

Make a list of all these costs so that you can create a total budget. The aim of this shouldn’t be to scare yourself but to go into home ownership with a suitable sum of money behind you so that you’re not financially strained. After all, you can’t borrow money for these additional expenses, as any new loans - no matter how small - might cause a lender to reject you.

Shopping around is essential before applying for a mortgage. The first lender you find may not provide the best offer - each lender uses different affordability rules and therefore application approval rates and interest fees can vary.

By comparing lots of different lenders, you have a better chance of finding a better deal. Many homebuyers work with a mortgage broker to help them compare deals - which could include exclusive offers only available through that broker.

An Agreement in Principle (AIP) - also known as Decision in Principle or Mortgage in Principle - is an indication from a lender of how much they might be willing to lend you, based on some basic checks.

An AIP matters because it gives you a realistic price range for your property search. Estate agents and sellers may also take you more seriously if you already have one, plus it may help to speed up the formal application at a later date. AIP don’t lock you into a lender and often require soft credit checks that won’t affect your credit score, so they’re worth taking advantage of. Just be wary that an AIP may be a rough estimate and not always an accurate figure, so stay well within this figure when looking at properties so that you don’t fall in love with a home that ends up being the slightest bit too expensive.