The one and only time I threw a fit in a relationship, money was involved. What was I fighting over? The price of cutlery. Needless to say, a small amount of money turned into a big problem. While I wouldn’t consider arguing over the price of forks ideal, it did serve as a wake-up call.
When it comes to issues larger than silverware — say, buying a house together — being honest about finances can mean the difference between scoring your perfect home and walking away with bruised hearts.
To maintain the peace in your application process (and relationship), make sure to avoid these common mortgage missteps.
Misstep: Forgetting credit gaffes
Since a strong credit report is a huge factor in the mortgage application process, forgetting about even one negative mark can put your entire application at risk.
Having to tell your partner that an application was rejected because of a negative credit mark you forgot to mention? Not a conversation you want to have.
How to avoid: Check your credit report before submitting your application, even if you’re certain you have stellar credit.
Since negative credit marks aren’t always removed quickly, it’s essential to review your credit report to avoid being surprised. If you uncover any unexpected (or forgotten) negative marks, share them with your partner so you can brainstorm ways to boost your credit.
Misstep: Fibbing on your mortgage application
It’s tempting to write a “fluffed up” number on your mortgage application. Especially if you convince yourself that you can cover your bases later.
But lying on your application puts your integrity on the line — in your application process and in your relationship. If that’s not enough to give you pause, keep in mind: lying on your application is a federal offense. What you consider a harmless lie could result in serious consequences.
How to avoid: It’s crucial that you come clean with your partner if you divert from the honest path.
If you still find yourself wanting to sway the numbers in your favor, pinpoint where this urge is coming from and discuss ways to reach that ideal number together.
Misstep: Withholding debt ratio (when it matters)
Believe me. Debt is the worst. I know it. You know it. Your partner knows it too.
But trying to cover up your debt ratio when applying for a mortgage is a little like using saran wrap to cover a leak in your ceiling. It’s not fixing anything and it’s not going to disappear from sight or mind.
How to avoid: Be honest and upfront with your debt numbers — sooner rather than later.
While it might feel intimidating to share the layout of your debt with your partner, withholding this information gives him or her a foggy picture of your true financial situation. The debt may be yours, but paying it off doesn’t have to be an isolated process.
Bonus: getting support from outside sources (friends, family, and your partner) can give you the motivation you need to reach your goal of zero debt.
Misstep: Waiting too long to open up the lines of communication
Money talk is hard. But not talking about money is even harder. Worse, the longer you put off talking about finance, the more difficult it can be to broach the topic down the road. But one thing is for sure: You definitely don’t want to be having your first money chat with your partner as you’re sitting down to apply for a mortgage.
How to avoid: Make talking about money a regular part of your routine.
If you’re worried it will be stressful or boring, then try reframing your approach to your money conversations. For example, put a time limit on the conversation to give it some urgency, or schedule a monthly brunch to discuss your financial goals over waffles and bacon.
Remember, money doesn’t have to be a taboo topic. Consider financial discussions a natural (and critical) part of the home loan application process.