Applying for a mortgage is one of the biggest financial steps you’ll take — and small mistakes can have big consequences.
From missing paperwork to poorly timed credit checks, simple oversights can delay your approval or even lead to a decline.
The good news? Most of these pitfalls are easy to avoid — especially with the right preparation and guidance.
Here are the seven most common mortgage mistakes we see at Mortgage Knight, and how you can make sure you don’t repeat them.
Applying Without Checking Your Credit Report
Lenders use your credit history to assess how reliable you are as a borrower.
Even minor issues — like outdated addresses or missed payments from years ago — can cause problems.
How to avoid it:
- Check your credit file with Experian, Equifax, or TransUnion.
- Correct errors before you apply.
- Avoid multiple new credit applications within 6 months of applying for a mortgage.
Overestimating How Much You Can Borrow
Online calculators are useful, but they often give a simplified view.
Lenders look at your full financial profile — income, debts, dependants, and outgoings — to calculate affordability.
How to avoid it:
- Use a whole-of-market broker like Mortgage Knight to check realistic affordability with multiple lenders
- Get a Decision in Principle (DIP) before house hunting to avoid disappointment.
Making Major Financial Changes Mid-Application
Taking out new credit, changing jobs, or moving large sums of money during your mortgage application can raise red flags with lenders.
How to avoid it:
- Keep your finances stable until after completion.
- Don’t switch jobs, open new accounts, or finance new purchases during the process.
Forgetting to Budget for Fees
Beyond your deposit, there are several additional costs:
- Valuation fees
- Legal fees
- Broker fees
- Stamp Duty (if applicable)
How to avoid it:
Create a clear budget from the start. At Mortgage Knight, we help clients map out every cost upfront so there are no surprises later.
Providing Incomplete or Inconsistent Documents
Lenders need to verify every detail — and inconsistent income, mismatched addresses, or missing payslips are common causes of delay.
How to avoid it:
- Gather all documents early: ID, bank statements, payslips or tax returns.
- Double-check that all addresses and names match exactly.
- Use PDF copies — not screenshots or photos.
Ignoring Existing Debts
Some borrowers assume lenders won’t notice small loans or credit card balances — but they always do.
Debt affects affordability and could reduce how much you can borrow.
How to avoid it:
- Be upfront about all debts.
- Pay off or reduce balances before applying where possible.
- Keep credit utilisation below 30% of your total limit.
Not Using a Broker
Many applicants apply directly with their bank, thinking it’s quicker.
However, every lender has different rules — and choosing the wrong one first could mean a decline that affects your credit score.
How to avoid it:
Work with a whole-of-market broker who understands your circumstances.
Mortgage Knight compares over 90 lenders, saving time and avoiding unnecessary credit checks.
Case Studies
Case Study 1: Sarah – Self-Employed Applicant Declined by Her Bank
Sarah applied directly with her high street bank and was rejected due to inconsistent income. Mortgage Knight found a specialist lender using her last two years’ accounts — and got her approved.
Case Study 2: Liam – New Job During Application
Liam switched jobs mid-application, causing delays. We liaised with the lender, supplied his new contract, and restructured the case so he could still complete on time.
Case Study 3: Jade – Missed Credit Card Payment
A small missed payment nearly cost Jade her mortgage. After we helped her update her credit file and include a note of explanation, the lender approved her with no issue.
Frequently Asked Questions
Q1. Why do mortgage applications get declined?
Ans: Common reasons include poor credit history, inconsistent income, or applying with the wrong lender criteria.
Q2. Does changing jobs affect a mortgage application?
Ans: It can, especially if you’re still in a probation period. Lenders prefer stable employment history.
Q3. Can I get a mortgage with a small amount of debt?
Ans: Yes — as long as your overall affordability remains strong and repayments are up to date.
Q4. How many bank statements do lenders need?
Ans: Usually three months, but some require six if your income fluctuates.
Q5. Should I use a mortgage broker or go direct?
Ans: A broker gives access to the full market, helps present your application correctly, and reduces the risk of declines.
Q6. Can you help if I've been rejected elsewhere?
Ans: Yes, we can review your situation and potentially identify alternative lenders who may take a different view. However, it’s important to understand why the previous application was unsuccessful and whether your circumstances need to change before reapplying.
Professional Mortgage Guidance
If you’re a contractor looking for professional mortgage guidance, we’re here to help. Our specialist knowledge and lender relationships enable us to provide expert advice tailored to your situation.
Avoid costly mistakes and get your mortgage approved first time.
Mortgage Knight’s expert advisers will guide you through every step, helping you prepare, apply, and secure the best possible deal.
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