Things To Avoid After You Apply for a Mortgage.
Applying for a mortgage is one of the most exciting — and nerve-wracking — steps in the homebuying process. Once your lender has reviewed your credit, income, and assets, it may feel like you’re in the clear. But not so fast. Even after you’ve submitted your application, your financial behavior can still impact whether your loan is ultimately approved.
Lenders want to see stability, reliability, and consistency between the time you apply and the time you close. That’s why it’s essential to avoid certain actions that could unintentionally delay or derail your approval. In this article, we’ll walk you through the most common pitfalls and why it’s so important to talk to your lender before making any financial changes.
1. Don’t Change Jobs or Become Self-Employed
Switching jobs or becoming self-employed after applying for a mortgage can be a red flag. Lenders want to see at least two years of stable employment and predictable income. Even if your new job offers better pay, changing roles — especially across industries — could trigger a loan denial or delay.
If you’re considering a job change, talk to your lender first. They may be able to verify the new position and salary, but only if it’s a structured transition with verifiable income.
2. Avoid Large Purchases (Yes, Even for Your New Home)
It’s tempting to start buying furniture, appliances, or even a new car before you close. But making large purchases during the mortgage process can hurt your debt-to-income ratio (DTI) — a key factor lenders use to evaluate your loan eligibility.
Even if you can afford the new sofa or washer and dryer, wait until after your loan has officially closed and the keys are in your hand. Otherwise, your approval could be delayed — or denied.
3. Don’t Open or Close Credit Accounts
Your credit profile is carefully reviewed at the beginning and again right before closing. Opening a new credit card, personal loan, or financing agreement — even if it seems minor — can drop your credit score or increase your debt load, both of which hurt your loan standing.
On the flip side, closing credit accounts can also negatively impact your score by affecting your credit utilization ratio and the average age of your accounts. Keep all accounts stable and active until after the deal is done.
4. Don’t Miss Any Payments
Missing a credit card, loan, or utility bill payment can damage your credit score significantly. Your mortgage lender may pull a final credit report before closing, and any new derogatory marks could lead to a denied application.
Even if the payment is just one day late, it can make you appear financially unreliable. Use automatic payments or reminders to ensure every bill is paid on time during this critical period.
5. Don’t Make Large Deposits Without Documentation
Lenders carefully examine your bank statements to confirm you have enough money for your down payment and closing costs — and to ensure no suspicious activity is happening. If you make large cash deposits or receive unusual transfers without explanation, it can raise red flags.
Always be prepared to document the source of any non-payroll deposit, whether it’s a gift, refund, or transfer. Talk to your lender before moving large amounts of money between accounts.
6. Don’t Cosign for Anyone
It may seem harmless to help a family member by cosigning a loan — but to your mortgage lender, this is new debt that you’re equally responsible for. Even if you’re not making the payments, it still counts against your debt-to-income ratio.
Cosigning for someone during the loan process could lead to your own loan being denied. Always wait until after you close before committing to any new financial obligations.
7. Don’t Stop Saving
You might already have enough for the down payment, but don’t stop saving just yet. Having additional cash reserves is always a good idea, especially if unexpected expenses pop up during underwriting or closing. Lenders also love to see a healthy savings account — it shows you’re prepared and financially responsible.
8. Don’t Transfer Money Between Accounts Without a Plan
Shuffling money between checking, savings, or investment accounts might seem harmless, but to your lender, it could trigger a need for more documentation. Every transfer must be tracked and explained, and the more you move your money, the more complex the paper trail becomes.
If you need to move funds, speak with your loan officer first and document everything.
9. Don’t Ignore Your Lender
This is the most important point of all: Always communicate with your lender before making any financial moves. Whether you’re thinking of buying a new car, switching jobs, or receiving a large gift from a family member — your loan officer should be your first call.
They can help you avoid costly mistakes and guide you toward a smooth closing.
Final Thoughts: Stay the Course
Once you apply for a mortgage, the goal is to keep your financial situation as stable as possible. The mortgage process may seem long, but it’s a short-term sacrifice for long-term gain. You’re building the foundation for your future — don’t let impulsive decisions jeopardize it.
Stay consistent. Stay transparent. Stay in touch.
If you’re ready to apply for a mortgage or have questions about the homebuying process, Contact Us Today — we’re here to guide you every step of the way.
