Make Sure to Avoid These Before Closing On a Home
Mortgage approval is based on documented information about your credit, debt, income, employment, assets, and other qualifying factors. Some of that information may be verified again before closing. A material change doesn’t necessarily mean the loan cannot close, but it may require additional documentation, recalculation, or underwriting. The practical objective during this final period is simple: avoid changing the financial assumptions behind your approval unless necessary, and tell your lender promptly when something does change.
AVOID UNNECESSARY CHANGES TO YOUR CREDIT
The issue with credit activity before closing is not that every change is harmful. The issue is that new debt or a changed credit profile may alter information used in underwriting.
Pay particular attention to these areas:
- Opening a new credit account:
New financing may create an additional liability. If that obligation must be included in your debt-to-income calculation, the lender may need to reevaluate qualification. - Increasing existing balances:
A significant purchase can increase both the outstanding balance and required monthly payment on an existing account. The monthly obligation, rather than simply the purchase itself, may affect underwriting. - Closing or changing existing accounts:
Changes to established credit accounts can affect elements of your credit profile. Unless there is a specific reason to make the change before closing, maintaining the existing status is generally simpler. - Initiating a credit dispute or correction:
Inaccurate information should be addressed, but a dispute or resulting update during underwriting may require additional review. Coordinate the timing and process with your lender.
DON’T CHANGE YOUR EMPLOYMENT WITHOUT TALKING TO YOUR LENDER
Employment changes matter primarily because they may change the qualifying income used in underwriting.
A new employer does not automatically create a problem. However, a change in compensation structure, reduced hours, transition from salary to commission, move to self-employment, leave of absence, or other income change may require additional verification and could affect the income the lender is permitted to use.
If an employment change occurs, disclose it promptly. The relevant question is not simply, “Did you change jobs?” It is, “Does the new employment and income still satisfy the loan’s underwriting requirements?” Your lender is the appropriate person to answer that question.
BE CAREFUL WITH LARGE OR UNUSUAL BANKING ACTIVITY
Lenders may be required to verify assets used for the down payment, closing costs, and reserves. The concern is therefore not simply that a deposit or transfer is “large.” The important questions are where the funds came from, whether they are eligible for the transaction, and whether they can be documented when required.
If you receive gift funds, sell an asset, transfer substantial funds between accounts, or make a significant deposit, retain documentation showing the source and movement of the money. Before withdrawing or spending funds designated for closing or reserves, confirm that sufficient verified assets will remain available.
Overdrafts or other account activity may also create additional questions depending on the circumstances. Maintaining clear records and adequate balances can reduce unnecessary documentation issues.
DON’T MAKE MAJOR FINANCIAL CHANGES WITHOUT CALLING YOUR LENDER
This principle covers most pre-closing concerns. If a change could affect qualifying income, liabilities, credit, or verified assets, disclose it and ask whether additional documentation or underwriting is required.
The lender—not the borrower, real estate agent, friend, or internet—is in the best position to determine how a particular change affects the specific loan program and file.
KEEP YOUR CLOSING FUNDS READY
Maintain sufficient accessible funds for the amount required at closing and review the Closing Disclosure when it is provided. Compare the final loan terms, costs, and cash-to-close with what you expected, and resolve questions before settlement.
Protect the transfer of those funds as carefully as you protected the funds themselves. Wire-fraud schemes frequently rely on impersonation and false instructions. Independently verify wiring information with the appropriate title, escrow, closing, or settlement company through a trusted contact method before initiating the transfer.
UNTIL YOU HAVE THE KEYS…
Normal spending and ordinary financial activity do not need to stop simply because you are approaching closing. The objective is stability, not inactivity.
Continue paying obligations on time. Avoid unnecessary new debt. Preserve required assets. Report material employment or income changes. Document significant transfers. Ask before making a financial move when its effect on the mortgage is unclear.
If you have questions about the loan or closing process, contact me and I can help connect you with the lender or closing professional responsible for the answer.
At this stage, consistency is useful: preserve the financial profile that qualified, document anything that changes, and arrive at closing without introducing an avoidable new variable.