Preapproved for a Mortgage? 7 Mistakes to Avoid Before Closing

15 minutes ago

4 min read

Couple reviewing paperwork at a kitchen table, with the title “Preapproved for a Mortgage? 7 Mistakes to Avoid Before Closing.”

You’ve been preapproved, found a home you love, and started imagining life in your new space. Now comes the stretch between getting your offer accepted and receiving the keys. During that time, everyday financial decisions still matter. Buying furniture, accepting a job offer, or moving savings may require another look at your mortgage application.

Preapproval is an important step, but it is not a guarantee of final loan approval.

Your lender still needs to complete its review and confirm that the loan requirements are met. The good news: you don’t have to navigate these decisions on your own. Here are seven common mistakes to avoid before closing, with practical steps to help keep your purchase moving.

Here are the 7 Mistakes to Avoid Before Closing on Your Home

1. Making a major purchase without checking first

Couple holding car keys in a showroom, with a red prohibition symbol illustrating a major purchase to avoid before mortgage closing.

That new sofa or appliance package can be tempting, especially when a store offers deferred payments. Financing it can add debt, while paying cash can reduce the funds available for your down payment, closing costs, or required reserves, which is money some loans require you to have left after closing. A purchase does not automatically prevent you from getting a mortgage. Its effect depends on your finances and loan requirements.

What to do: Before making a substantial purchase, ask your mortgage professional how it could affect your loan and when it would be appropriate to proceed.

2. Applying for new credit or closing existing accounts

Opening a store card for a discount, applying for a car loan, or taking out a personal loan can change your credit profile. Even an application that doesn’t lead to a new account can generate a hard inquiry that may affect your scores.

Closing a credit card can also reduce your available credit and increase the percentage you’re using. This doesn’t mean every credit check is a problem. Checking your own credit does not lower your scores, and mortgage rate-shopping inquiries receive special treatment under credit-scoring rules.

What to do: Check before applying for unrelated credit or closing accounts during the mortgage process. Continue paying your existing accounts responsibly.

3. Changing jobs or how you’re paid without discussing it

A better job offer can be a positive move. Changing employers does not automatically mean you cannot close, but your lender may need updated documents and another review of your income.

Changes in hours or pay structure can matter too, particularly if you move from a salary to commission income or self-employment.

What to do: Discuss a planned change early. Share the start date, compensation details, and any employment documents your lender requests.

4. Depositing money without keeping a clear paper trail

A family gift or proceeds from selling an item may help with your purchase. Before those funds can be used, however, your lender may need to verify their source. Not every deposit requires extra paperwork. Routine payroll deposits and clearly documented transfers may be readily identifiable. Gift funds have their own eligibility and documentation requirements.

What to do: Before accepting funds intended for your purchase, ask what records are needed. Keep relevant documentation, such as transfer confirmations or evidence of a sale, and follow your lender’s instructions for gifts.

Hand holding a card with “Common Mistakes” handwritten in blue.

5. Moving funds or changing bank accounts unnecessarily

Combining savings into one account may feel like a helpful way to prepare for closing. It can also create additional documentation requests. Moving money between your own accounts is not automatically a problem. What matters is whether the lender can verify the funds and trace any transfers.

What to do: Check before moving purchase funds or closing an account. Keep statements and transfer records from both the sending and receiving accounts.

6. Co-signing a loan for someone else

Helping a relative finance a car can affect your mortgage application, even if that person plans to make every payment. Co-signing makes you responsible for the debt. The payment may count toward your debt-to-income ratio, which is the comparison of your monthly debt obligations with your qualifying income. Whether a debt paid by someone else can be excluded depends on the applicable rules and documentation.

What to do: Speak with your mortgage professional before co-signing. Someone else’s promise to pay does not, by itself, establish that the payment can be excluded.

7. Missing payments or delaying document requests

Between inspections, packing, and moving plans, it’s easy to overlook a bill or a message requesting updated paperwork. Late payments can hurt your credit. Delayed documents can hold up the loan review.

What to do: Keep track of payment due dates and respond promptly to your lender’s requests. If you cannot obtain a document right away, explain the situation so you can discuss the next step.

Keep your closing on track

Before making a major purchase, moving money, or changing jobs, check with your mortgage professional. If you’ve already taken one of these steps, reach out soon so your lender can review the details and let you know whether anything else is needed.

Have questions about your next step before closing? Contact Mortgage Source for guidance on your financing.