What NOT to do before closing on your mortgage

You’ve spent so much time in your home buying process, the last thing you want is to derail it at the last minute. Here are some things you should not do before you close on your mortgage, to ensure a smooth mortgage closing.

1. Don’t take out new credit (credit cards, car loans, personal loans, or lines of credit).
   Your mortgage approval is based on your debt-to-income ratio (DTI). New debt increases your monthly obligations and can cause the loan to be re-qualified, delayed, or denied.
2. Don’t make large purchases on credit. Even if you were planning to buy furniture or appliances for the new home, large charges can increase your credit utilization or minimum payments, which may impact your credit score and qualification.
3. Don’t open or close credit accounts. Opening accounts can lower your average credit age and trigger a credit inquiry, while closing accounts can reduce available credit and raise utilization, both of which may affect your score.
4. Don’t move large amounts of money between accounts without talking to your lender. Lenders must source and document funds used for closing. Unexpected transfers can create documentation issues and delays.
5. Don’t change jobs or become self-employed. Your loan approval is based on verified employment and income stability. A job change can require re-verification or a full re-underwrite.
6. Don’t deposit large amounts of cash into your bank account. Cash deposits are difficult to document and may not be allowed to be used for closing because lenders must verify where the funds came from.
7. Don’t miss or be late on any payments. A late payment can lower your credit score and may cause the lender to re-evaluate the loan approval.
8. Don’t co-sign for someone else’s loan. Even if you’re not making the payments, the new obligation can increase your DTI, which may impact your qualification.
9. Don’t switch bank accounts. Lenders typically verify specific accounts used for assets and reserves. Changing accounts can create new documentation requirements and delays.
10. Don’t assume you’re “done” once you’re approved. Lenders often perform final credit, employment, and asset checks right before closing. Changes during this time can still affect your approval.