What NOT to Do Before Your Mortgage Closes
Your mortgage approval is in place, but until the deal is officially closed, your financial situation must remain stable. Making certain changes before closing can put your mortgage at risk. Avoid the following actions to ensure a smooth closing process.
Employment & Income
Do not quit your job – Lenders verify employment before closing, and sudden changes can delay or cancel your mortgage.
Do not reduce your income – Avoid switching from full-time to part-time work or taking unpaid leave.
Credit & Loans
Do not apply for new credit or loans – This includes new credit cards, auto loans, or store financing. A credit check may be required before closing, and new accounts can lower your credit score or increase your debt-to-income ratio.
Do not close existing credit accounts – Even if unused, closing accounts can impact your credit utilization ratio and negatively affect your score.
Do not co-sign a loan or mortgage for someone else – This increases your financial liability and could impact your mortgage approval.
Banking & Payments
Do not stop paying your bills – Late or missed payments can affect your credit score and trigger concerns from your lender.
Do not make large deposits into your bank account – Unexpected deposits may require documentation and delay closing. If necessary, provide a clear paper trail for any deposits.
Do not spend money set aside for your down payment or closing costs – Ensure these funds remain untouched to meet lender requirements.
Real Estate & Mortgage-Related Actions
Do not make changes to your real estate purchase agreement – Any modifications to the contract, such as changing the purchase price, must be approved by your lender.
Do not accept mortgage advice from unqualified individuals – This includes realtors, financial planners, life insurance agents, or well-meaning family members. Always consult with your mortgage professional before making decisions that could impact your financing.
Checklist: What to Do Instead
- ✔ Maintain consistent employment and income.
- ✔ Keep your existing credit accounts open and in good standing.
- ✔ Make all scheduled payments on time.
- ✔ Ensure all mortgage-related funds remain accessible and untouched.
- ✔ Communicate with your mortgage professional before making any financial changes.
Final Thoughts
Keeping your finances stable before closing is crucial. If you're considering a financial change, contact your mortgage broker first to discuss potential impacts. Staying proactive can prevent unnecessary delays and ensure a stress-free closing process.
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