Getting mortgage approval is an exciting step toward becoming a homeowner.
However, the work is not necessarily finished once your application receives initial approval. Your lender may still need to verify financial information, review documents and complete final underwriting before your loan can close. During this period, certain financial decisions can complicate the process.
The short answer: keep your finances stable between approval and closing — no new credit, no big purchases, no job changes, and respond to your lender's document requests promptly. A licensed loan officer can walk you through the mortgage loan options and what to expect.
Here are 10 things to avoid while preparing for your mortgage closing.
1. Avoid opening new credit accounts
Applying for a new credit card or loan can change your credit profile. A new account may create an additional monthly payment that affects your overall debt obligations. Speak with your loan officer before applying for new credit.
2. Avoid financing a new vehicle
A car purchase may introduce a significant new monthly debt obligation. Even when the monthly payment seems affordable, it may affect your mortgage qualification. Consider postponing major purchases until your mortgage has closed.
3. Avoid changing jobs without discussing it
Employment and income stability are important parts of mortgage underwriting. A new job, change in compensation or shift from salaried to commission-based income may require additional documentation. Always inform your lender before making an employment change.
4. Avoid making large unexplained bank deposits
Mortgage lenders may need to verify where your funds originated. An unexplained large deposit can create additional documentation requests. Keep records for transfers, gifts, savings and other sources of funds.
5. Avoid moving money between accounts without records
Transferring money between your own accounts is not necessarily a problem. However, lenders may need a clear paper trail. Keep statements and transfer confirmations available.
6. Avoid missing existing payments
Continue paying your existing credit cards, loans and other obligations on time. Late payments can affect your credit profile and mortgage application.
7. Avoid making large furniture purchases on credit
It can be tempting to purchase furniture and appliances before moving into your new home. However, financing these purchases can create new debts before closing. Consider waiting until after the mortgage is finalized.
8. Avoid changing your down payment plans unexpectedly
Changing the amount of your down payment may affect your loan amount, loan-to-value ratio and mortgage terms. Discuss any proposed changes with your lender first.
9. Avoid ignoring your lender's document requests
Your lender may ask for updated bank statements, pay stubs, employment verification or additional explanations. Respond promptly and submit complete documents. Delays can affect your closing schedule.
10. Avoid ignoring your Closing Disclosure
Before closing, carefully review your Closing Disclosure. Compare it with your Loan Estimate and look at:
- Loan amount.
- Interest rate.
- Monthly payment.
- Closing costs.
- Cash to close.
- Loan term.
- Other loan conditions.
Ask your lender or closing professional about anything you do not understand.
Your mortgage closing checklist
Before closing, make sure you:
- Have submitted all requested documents.
- Have maintained your existing payment obligations.
- Have discussed any financial changes with your lender.
- Have confirmed your closing date.
- Have reviewed your Closing Disclosure.
- Know how the closing funds must be transferred.
- Have arranged your homeowner's insurance.
- Have checked the final documents before signing.
Frequently asked questions
Can I buy furniture before closing on my house?
It is generally safer to avoid financing large purchases until your mortgage has closed. Ask your lender before taking on new debt.
Can I change jobs after mortgage approval?
A job change may require further income verification and underwriting review. Inform your loan officer before making the change.
Does my credit get checked again before closing?
Lender practices vary, but additional credit and financial verification may occur before closing.
What happens if my financial situation changes?
Tell your mortgage professional promptly. They can explain whether additional documentation or review is needed.
Ready to move forward with your home loan?
The final stages of a mortgage can feel overwhelming, but staying organized and communicating with your lender can help. Vesta Lending is here to help you understand your mortgage options and navigate the home financing process. When you are ready, get a free quote or get pre-approved with Alex.
You can also call Alex Al-Ammar at (313) 992-9898 or email Alex@vestalending.com.
This article is for general information only. It is not legal, tax or financial advice. Loan programs, guidelines and eligibility depend on your credit, income, property and lender requirements. Speak with a qualified professional about your individual situation.
Official references: Consumer Financial Protection Bureau — Submit documents and answer requests from the lender · Consumer Financial Protection Bureau — Close the deal
