Pre-Closing Mortgage Mistakes: A Comprehensive Guide to

Your lender may re-check your credit, bank statements, and employment right before funding. Here’s what not to do financially between mortgage approval and closing:

• Credit: Don’t apply for new credit or increase existing debt.
• Debt: Avoid large purchases or cash-out refinances.
• Deposits: Don't make large deposits without explaining the source.
• Job Changes: Don’t change jobs, especially to a lower-paying position.
• Transfers: Avoid transferring money between accounts unless necessary.
• Missed Payments: Ensure all bills are paid on time.
• Co-Signing: Don’t co-sign a loan or any other debt.
• Marital Status: Don't change your marital status without notifying your lender.

The 9 Risks, at a Glance

Jump to any section: Credit · Debt · Deposits · Job Changes · Transfers · Missed Payments · Co-Signing · Marital Status · Closing Accounts

1. Applying for New Credit

Lenders re-pull credit shortly before funding. A new credit inquiry or account -- a car loan, a store card, a phone finance plan -- adds debt and a hard inquiry that can push your debt-to-income ratio or credit score outside approval range. Wait until after closing for any new credit application.

2. Taking on New Debt or Large Purchases

Furniture, appliances, and other big-ticket purchases -- even paid in cash from a card you already have -- raise your balances and utilization right when your file is being re-verified. Hold off on major purchases until after you have keys.

3. Large, Unexplained Deposits

Lenders must source large deposits to rule out an undisclosed loan propping up your funds. An unexplained deposit can trigger a documentation request that delays or jeopardizes closing. If you receive a gift or bonus, keep a paper trail (gift letter, pay stub) ready.

4. Changing Jobs

Your approval is based on verified income and employment history. Switching jobs -- even for a raise -- resets that verification and can be treated as a red flag, especially if it's a change in pay structure (salary to commission) or industry. Tell your loan officer before you make a move, not after.

5. Moving Money Between Accounts

Shuffling funds between accounts can make your bank statements harder to reconcile and may look like you're trying to obscure the source of funds, even when there's a simple explanation. Keep transfers minimal and be ready to explain any that appear on your statements.

6. Missing a Payment

A single late payment reported during underwriting can lower your credit score or trigger a new review. Keep every bill on autopay or otherwise on time through closing, including small recurring charges that are easy to forget.

7. Co-Signing for Someone Else

Co-signing adds that debt's full monthly payment to your DTI calculation, even though you're not the one using the money. It can be enough on its own to push a marginal approval over the edge.

8. Changing Marital Status

Marriage or divorce can change whose income and debts are considered, and in community-property states can add a spouse's debts to the file even if they're not on the loan. Notify your lender immediately if your marital status changes during the process.

9. Closing Existing Credit Accounts

It feels responsible to close a card you're not using, but doing so before closing can shorten your average account age and reduce your total available credit -- both of which can lower your score right when it matters most. Leave existing accounts open and unused until after closing.

Trust Content

This guide has been reviewed by a loan expert. However, lender overlays and state rules can change documentation needs for gifts, deposits, and title changes. Always ask your loan officer first!

Ask a loan officer about your specific situation