You’ve found your dream home, your offer is accepted, and your bank has approved your financing— the deal is done, right? But before you celebrate, there’s one thing you need to know: your mortgage isn’t fully approved until closing day. Lenders will re-check your financials before finalizing your loan, and even small changes to your income, debt, or credit can derail the entire deal. To make sure your home purchase goes smoothly, here are the most common mistakes that can put your mortgage at risk—and how to avoid them!
Lenders want to see a stable income, so switching jobs, becoming self-employed, or quitting can delay or even cancel your mortgage approval. If you’re planning a career change, wait until after closing to make any big moves.
A new car might be exciting, but a new auto loan can hurt your debt-to-income ratio, which is key to your mortgage approval. Adding new debt can lead to higher monthly obligations—or worse, losing your mortgage altogether.
Whether it’s your credit card, car loan, or even a small bill, missing a payment can lower your credit score right before closing. Even a slight drop in your credit could change your interest rate or mortgage approval status.
Your lender verified your savings to ensure you have enough funds for your down payment and closing costs. If your account balance suddenly drops below what you reported, your lender may question whether you can afford the home.
All debts—credit cards, student loans, personal loans—need to be fully disclosed on your mortgage application. If an undisclosed debt shows up during the lender’s final check, it could result in delays or denial of your mortgage.
Big purchases—like furniture, appliances, or expensive electronics—can impact your finances. Even if you plan to pay in cash, spending large amounts can change your savings balance, which your lender will review before final approval.
Avoid opening new credit cards, taking out loans, or even applying for store financing before your mortgage closes. Lenders see new credit inquiries as a risk, and it could lower your credit score or change your loan eligibility.
Unexpected large deposits—especially in cash—can raise red flags for lenders, who need to verify where your money is coming from. Always check with your loan officer before making big deposits.
Your lender tracks your financials throughout the mortgage approval process. Switching banks, closing accounts, or transferring large sums of money can make it harder for them to verify your funds, leading to potential delays.
Co-signing a loan—even if you’re not making the payments—adds new financial responsibility to your name. Lenders will count this as your debt, which could put your mortgage approval at risk.
Your mortgage approval is based on your financial situation at the time of application—so any big changes before closing could put your home purchase at risk. If you’re unsure about something, talk to your mortgage broker first!
Looking for expert guidance on buying a home? I'm here to help! Let’s grab a coffee and chat about how to make your home-buying process as smooth as possible.
1. Don’t Change Jobs or Quit Your Job
Lenders want to see a stable income, so switching jobs, becoming self-employed, or quitting can delay or even cancel your mortgage approval. If you’re planning a career change, wait until after closing to make any big moves.
2. Don’t Buy a Vehicle (Unless You Want to Live In It!)
A new car might be exciting, but a new auto loan can hurt your debt-to-income ratio, which is key to your mortgage approval. Adding new debt can lead to higher monthly obligations—or worse, losing your mortgage altogether.
3. Don’t Miss Any Payments
Whether it’s your credit card, car loan, or even a small bill, missing a payment can lower your credit score right before closing. Even a slight drop in your credit could change your interest rate or mortgage approval status.
4. Don’t Drain Your Savings
Your lender verified your savings to ensure you have enough funds for your down payment and closing costs. If your account balance suddenly drops below what you reported, your lender may question whether you can afford the home.
5. Don’t Hide Any Debts
All debts—credit cards, student loans, personal loans—need to be fully disclosed on your mortgage application. If an undisclosed debt shows up during the lender’s final check, it could result in delays or denial of your mortgage.
6. Don’t Make Large Purchases Before Closing
Big purchases—like furniture, appliances, or expensive electronics—can impact your finances. Even if you plan to pay in cash, spending large amounts can change your savings balance, which your lender will review before final approval.
7. Don’t Apply for New Credit
Avoid opening new credit cards, taking out loans, or even applying for store financing before your mortgage closes. Lenders see new credit inquiries as a risk, and it could lower your credit score or change your loan eligibility.
8. Don’t Make Large Deposits Without Talking to Your Lender
Unexpected large deposits—especially in cash—can raise red flags for lenders, who need to verify where your money is coming from. Always check with your loan officer before making big deposits.
9. Don’t Change Bank Accounts
Your lender tracks your financials throughout the mortgage approval process. Switching banks, closing accounts, or transferring large sums of money can make it harder for them to verify your funds, leading to potential delays.
10. Don’t Co-Sign a Loan for Someone Else
Co-signing a loan—even if you’re not making the payments—adds new financial responsibility to your name. Lenders will count this as your debt, which could put your mortgage approval at risk.
Keep Your Finances Steady Until Closing!
Your mortgage approval is based on your financial situation at the time of application—so any big changes before closing could put your home purchase at risk. If you’re unsure about something, talk to your mortgage broker first!
Looking for expert guidance on buying a home? I'm here to help! Let’s grab a coffee and chat about how to make your home-buying process as smooth as possible.