Don’t Let These Mortgage Hurdles Derail Your Homebuying Plans

Getting pre-approved is an exciting first step in the homebuying journey, but it’s not a guarantee. Many buyers assume that once they’ve got that pre-approval letter, they’re all set. The truth? Several things can still go wrong before closing day.

According to Melanie Bundy, helping clients avoid these pitfalls is one of the most important parts of her job. “I walk buyers through the process from start to finish because one small misstep can delay or even derail their loan,” she says.

Here are the top four hurdles buyers are running into in 2025 and how you can steer clear of them.

1. High Debt-to-Income Ratio (DTI)

This continues to be the number one reason for mortgage denials across the country. Your DTI compares your monthly debt payments (like student loans, credit cards, or car loans) to your gross income. Lenders use this number to assess whether you can realistically handle a mortgage payment.

“With today’s home prices, it’s easy to get stretched too thin,” Melanie explains on thebundyteam.com/home. “If your DTI is too high, your application could be declined even if your credit score looks good.”

How to avoid it: Start by paying down revolving debts, especially high-interest credit cards. Avoid taking on new debt before or during the mortgage process.

2. Credit Score Challenges

Even if you meet the minimum score required for a loan, a lower credit profile can still affect your approval odds or make the loan terms more expensive.

“Your credit history tells lenders how you handle money,” says Melanie. “Late payments, high balances, or too many inquiries can hurt your chances.”

How to avoid it: Keep your balances under 30% of your credit limits, make every payment on time, and avoid opening or closing credit accounts during the process.

3. Insufficient Funds for Closing

Many buyers focus solely on saving for the down payment, but that’s just one piece of the puzzle. You’ll also need to cover closing costs (typically 2 to 5% of the purchase price) and have enough left over for reserves.

“Some buyers get caught off guard by the total amount needed to close,” Melanie notes. “That’s why we encourage people to start saving early. Even small, consistent deposits add up.”

How to avoid it: Work with a loan officer early to understand your full cost breakdown. Ask about programs that can help with down payment or closing costs if needed.

4. Financial Changes During the Loan Process

This is one of the most common and avoidable deal breakers. Changing jobs, taking out a new car loan, or even co-signing for someone else can throw a wrench into your approval.

“It surprises people, but even a good change like a promotion can delay things if it happens mid-process,” Melanie explains.

How to avoid it: Keep your finances stable from pre-approval through closing. If something changes, talk to your lender before taking any action.

The Bottom Line: Pre-Approval Is Just the Starting Line

It’s exciting to get pre-approved, but it’s only step one. The mortgage process is full of moving parts, and having a trusted loan officer on your side can make all the difference.

“If you’re thinking about buying in 2025, I’m here to help you prepare,” Melanie says. “The earlier we start planning, the smoother the process will be.”

Sources: NAR.realtor, Experian.com, FreddieMac.com, Realtor.com