Getting pre-approved is important, but final loan approval is based on your full financial picture all the way through closing. Lenders usually recheck credit, employment, assets, and sometimes debt shortly before the loan funds.
That does not mean you have to freeze your life while you are buying a home. It does mean you should ask before making financial moves that could affect your approval.
1. Do not open new credit accounts
A new credit card, furniture account, personal loan, or auto loan can change your credit score and add a new monthly payment. Even if the payment seems small, it changes your debt-to-income ratio and requires the lender to re-run the approval. And remember that a lease is the same as a loan when qualifying for a mortgage.
If you have to take on new debt (e.g., your car dies and you have to replace it), alert your lender beforehand to discuss how it will affect your ability to qualify.
Shortly before you close, the lender usually order a new credit report to make sure you don't have any debts that didn't appear on the application. If the report shows new inquiries that are not from your lender, you'll be asked to explain them before closing can occur.
2. Do not co-sign for anyone else's debt
Co-signing for a debt is the same as having your own new debt when applying for a mortgage.
3. Do not change jobs without talking to your loan officer
A job change doesn't automatically stop a mortgage, but it can change the documentation needed. A new role, new pay structure, probationary period, commission income, or self-employment can all affect the timeline.
And this may seem pretty obvious, but don't quit your job before closing. Shortly before closing, your lender will check that you're still employed - and likely to remain employed.
4. Do not move money around without a paper trail
Lenders need to document where your money for closing came from. Atypical deposits, account transfers, or funds from another person that appear on your account statements may require additional documentation.
If you need to transfer money between accounts, keep the records. If someone is giving you a gift, ask what documentation is required before the money changes hands.
5. Do not miss payments
A late payment during the mortgage process can be serious. Continue making all required payments on time, including credit cards, auto loans, student loans, rent, and your current mortgage if you already own a home.
6. Do not spend the money you need for closing
Your cash to close may change as taxes, insurance, interest, escrows, or final fees are confirmed. Keep enough money available until you've reviewed the final numbers. Don't spend the funds assuming you can replenish the account before closing. If your lender asks for an updated bank statement, and it no longer shows sufficient funds, it could delay closing.
7.Do not take cash advances on your credit cards
You cannot borrow the money for your down payment or closing costs. This restriction includes cash advances on your credit cards. If you do, your lender will have to recalculate your qualifying ratios considering the borrowed funds.
8. Do not assume something is too small to matter
If you're not sure whether something affects your loan, ask first. That's much easier than trying to fix a problem after it appears in underwriting.
The safest rule is simple: before closing, avoid major financial changes unless your loan officer knows about them and can explain the impact.