Avoid Mortgage Sabotage: What Not to Do Before Closing
Getting pre-approved is an important step toward buying a home—but your financial picture still matters all the way through closing. Changes to your credit, employment, bank accounts, debts or funds for closing can affect your mortgage qualification.
Before making a significant financial change while your loan is in process, talk with your loan professional first. A quick conversation can help you understand whether the change could affect your financing.
Protect Your Mortgage Approval Before Closing
Once your mortgage is in process, even ordinary financial decisions can affect your qualification. Here are three of the most important things to avoid before closing.
Three Things to Avoid While Your Loan Is in Process
Small financial changes can create big complications. Check with your loan professional before making any of these moves.
New Credit & Debt
Avoid opening new credit accounts, financing a vehicle, or taking on new debt without first talking with your loan professional.
Changing Jobs or Income
A job change, reduction in hours, or change in how you're paid can affect your mortgage qualification. Talk with your loan professional before making a change.
Moving Money or Making Large Purchases
Large purchases, large deposits, or moving money between accounts can affect your loan documentation. Check with your loan professional before moving funds or making a major purchase.
Financial Documentation
During the mortgage process, your lender may need updated financial documents or additional information before closing. Keeping important records organized and readily available can help prevent unnecessary delays.
Large or unusual deposits into your bank or other asset accounts may need to be documented. Before depositing money from a gift, sale of an asset, bonus, or another source, talk with your loan professional about what documentation may be required.
Keep copies of documents that show where the funds came from, such as a gift letter, check, bill of sale, or other supporting documentation.
Gift funds may be permitted for certain mortgage programs, but the requirements vary by loan type and situation. If someone plans to provide money toward your down payment or closing costs, tell your loan professional before the funds are transferred.
Your lender can explain the applicable requirements and what documentation may be needed for the gift.
Avoid packing away or discarding important financial documents while your mortgage is in process. Your lender may request updated information before closing, even if similar documents were provided earlier.
Keeping your financial records accessible until your loan has closed can make it easier to respond quickly if additional documentation is needed.
Questions Before You Make a Financial Change?
If your mortgage is in process and you're unsure whether a purchase, deposit, job change, account transfer or other financial decision could affect your financing, check with your loan professional before making the change.