10 Things to Avoid Between Mortgage Pre-Approval and Closing on Your New Home

Key Takeaways

Between mortgage pre-approval and closing, try to keep your employment, credit, debts, financial accounts, and homebuying plans as consistent as possible.

• Speak with your loan officer before changing jobs or how you earn income.
• Avoid applying for new credit, borrowing money, or co-signing.
• Postpone major purchases until after the mortgage has closed.
• Continue paying every obligation on time.
• Ask before moving, depositing, or withdrawing significant amounts of money.
• Do not change how you plan to occupy or use the property without telling your loan officer.
• Respond promptly to document requests and independently verify closing payment instructions.
• Report unavoidable changes as soon as possible.

Mortgage Pre-Approval Is Not Final Approval

Receiving a mortgage pre-approval is an important homebuying milestone. It may help you understand your potential purchasing position and show sellers that you have begun working with a lender.

However, pre-approval is not final approval, a commitment to lend, or a guarantee that the mortgage will close.

Your lender may continue reviewing and updating information before closing. Depending on the mortgage and applicable guidelines, that process may include verifying your employment, income, assets, credit obligations, property information, insurance, and other details used to evaluate the application.

Fannie Mae requires employment income used to qualify a borrower to be verified. Freddie Mac also maintains pre-closing employment-verification requirements for applicable mortgages.

The goal is not to put your life on hold. It is to avoid an unexpected change that could create additional documentation requirements, delay the process, or affect the lender’s evaluation.

Here are 10 activities to avoid or discuss with your loan officer before taking action.

1. Changing Jobs or How You Earn Income

Speak with your loan officer before voluntarily changing employers, reducing your hours, taking a leave of absence, becoming self-employed, or changing the way you are paid.

A new job with higher earnings is not automatically a problem. However, the lender may need to document the new position and determine whether the income can be used under applicable guidelines.

Changes from salary to commission, hourly employment, contract work, bonuses, tips, overtime, or self-employment can affect how income is documented and evaluated. Agency guidance contains different requirements for various income types and employment situations.

When an employment change is unavoidable, contact your loan officer promptly.

2. Applying for New Credit

Avoid applying for new credit cards, retail accounts, lines of credit, vehicle financing, or other credit unless you have discussed the need with your loan officer.

A credit application can result in an inquiry and may lead to a new account or monthly obligation. The CFPB explains that credit inquiries indicate that a consumer may be considering new debt. Before applying for new credit, notify your loan officer as they will need to take add this new debt into your debt-to-income ratio, which may impact your ability to qualify for a loan.

Mortgage shopping is treated differently from applying for several unrelated types of credit, but you should still coordinate mortgage-related inquiries with your lending team.

3. Taking Out a Loan or Co-Signing for Someone Else

A new vehicle loan, personal loan, student loan, installment account, or other obligation could affect the debts considered during underwriting.

Co-signing may also create an obligation in your name, even when another person expects to make every payment. Whether that obligation can be excluded from the lender’s calculations depends on the circumstances and applicable documentation requirements.

Fannie Mae’s current guidance addresses when debts paid by another person may be excluded, but the exclusion is not automatic.

Contact your loan officer before borrowing money or co-signing.

4. Making Major Purchases

It may be tempting to order furniture, appliances, electronics, renovation materials, or a new vehicle once your purchase offer is accepted.

Consider waiting until after closing.

A purchase financed with credit can create a new balance or monthly payment. A purchase made with money from your accounts can reduce the assets available for the down payment, closing costs, reserves, or other documented needs.

There is no single purchase amount that affects every borrower in the same way. The potential impact depends on the borrower, transaction, property, mortgage, and applicable guidelines.

Ask your loan officer before making a significant purchase.

5. Missing Payments or Allowing Accounts to Become Past Due

Continue paying every bill by its due date. This may include:

• Credit cards
• Vehicle loans
• Student loans
• Rent
• An existing mortgage
• Child support or alimony
• Personal or installment loans
• Other reported obligations

A late or missed payment can change your credit profile. Collection activity, returned payments, overdrafts, or significant increases in account balances may also create questions or require additional documentation.

Do not stop paying an account because you expect it to be paid off through the mortgage transaction. Follow the instructions provided by your loan officer and closing team.

6. Closing Credit Cards or Making Major Credit-Account Changes

Opening new credit is not the only account activity worth discussing with your loan officer.

Closing an established credit card, requesting several credit-limit increases, transferring significant balances, or adding yourself as a borrower on another account may change information in your credit profile.

The effect of closing an account varies and should not be predicted without reviewing the individual credit file. Avoid trying to “improve” your credit during underwriting through last-minute account changes unless your loan officer or an authorized credit professional has advised you to take a specific action.

Continue using existing accounts responsibly and keep balances and payments consistent whenever practical.

7. Changing Bank Accounts or Moving Money Without a Documented Trail

Your lender may need to verify that you have sufficient eligible money for the down payment, closing costs, and any required reserves. Fannie Mae and Freddie Mac both maintain documentation requirements for assets used in a mortgage transaction.

Closing an account, opening a replacement account, or moving money among several institutions is not necessarily prohibited. However, it may create more documentation.

The lender could request:

• Updated account statements
• Transaction histories
• Transfer confirmations
• Documentation showing the original source of the money
• Documentation showing where the money was moved

Keep copies of transaction records and speak with your loan officer before making significant changes when practical.

8. Making Unusual Deposits, Withdrawals, or Transfers

Large or unusual account activity may need to be reviewed and documented.

Examples include:

• Receiving gift money
• Moving money from an investment or retirement account
• Depositing proceeds from selling personal property
• Receiving a bonus, reimbursement, or legal settlement
• Transferring money among several accounts
• Withdrawing a significant amount
• Receiving money from a family member or business
• Using borrowed money for the home purchase

Freddie Mac requires lenders to document the source of certain large deposits needed to qualify a borrower for a purchase transaction. The exact review depends on the timing, amount, purpose, mortgage, and applicable guidelines.

Gift money and other sources may be acceptable for some mortgages, but the eligibility and documentation requirements vary.

Contact your loan officer before moving or depositing significant amounts whenever possible.

9. Changing How You Plan to Occupy or Use the Property

Tell your loan officer if your plans for the property change.

Examples could include deciding that:

• The property will not be your primary residence
• You will rent the property immediately
• A different borrower will occupy the property
• The home will instead be used as a second home or investment property
• You will operate a business from the property
• You will no longer move into the property as originally planned

Occupancy is part of the mortgage application and can affect underwriting, documentation, and mortgage eligibility. Fannie Mae’s Selling Guide distinguishes among principal residences, second homes, and investment properties.

Do not sign documents containing occupancy information that is no longer accurate. Contact your loan officer promptly so the application can be reviewed correctly.

10. Ignoring Requests, Closing Documents, or Suspicious Payment Instructions

A preventable delay can occur when a borrower does not respond to a lender’s request for updated documents or waits until closing day to raise questions.

Respond promptly but also protect your personal and financial information.

Review your Closing Disclosure

The CFPB states that borrowers generally receive the Closing Disclosure at least three business days before closing. Review it, compare it with your most recent Loan Estimate, and ask about errors or unexpected changes.

Do not sign documents you do not understand. The CFPB advises consumers to ask for an explanation when the mortgage presented at closing is not what they expected.

Verify instructions for delivering money

Mortgage-closing scams may involve an email that appears to come from a real estate agent, title company, settlement agent, or attorney. The message may provide false payment instructions or claim that legitimate instructions have changed.

Before sending money:

1. Confirm the required payment method with the closing or settlement agent.
2. Independently call a trusted phone number obtained earlier in the transaction.
3. Do not rely on contact information contained in an unexpected email.
4. Treat last-minute changes to payment instructions as suspicious.
5. Confirm receipt using a trusted phone number.

The CFPB notes that the money required at closing is typically delivered using a cashier’s check or bank wire, depending on the closing agent’s instructions.

What if a Change Cannot Be Avoided?

Not every life event can be postponed.

A job may end unexpectedly. A vehicle may need to be replaced. An account may be affected by fraud. A family situation may change. The property may sustain damage, or the closing date may move.

The most important step is early communication.

Contact your loan officer when there is a change involving your:

• Employment or income
• Credit or monthly obligations
• Bank or investment accounts
• Money needed for the transaction
• Marital status
• Occupancy plans
• Property or purchase agreement
• Homeowners or flood insurance
• Closing date
• Contact information

A change does not automatically mean that your mortgage cannot close. It may mean that the lender needs updated information, additional documents, or time to review the change.

Do not conceal new information or assume that it is too minor to mention.

A Practical Rule Until Closing

Before making a financial, credit, employment, or property-related change, contact your loan officer.

Your loan officer can explain:

• Whether the change needs to be documented
• Which records you should retain
• Whether the lender needs to update your application
• Whether the change could affect timing or eligibility
• What steps to take next

Preparing for Closing

As your closing date approaches:

1. Continue making payments on time.
2. Keep employment and income records available.
3. Save updated account statements and transaction confirmations.
4. Respond promptly to legitimate lender requests.
5. Review your Closing Disclosure carefully.
6. Independently verify payment instructions.
7. Ask questions before signing.
8. Report changes promptly.

The Bottom Line

Mortgage pre-approval is based on the information available when your application is reviewed. Your lender may verify or update that information before closing.

Changes involving employment, income, debts, credit, assets, occupancy, or the property may require additional review. Maintaining consistency and communicating early can help your mortgage team address questions before closing day.

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For educational purposes only. This article does not provide personalized financial, legal, credit, or tax advice. Mortgage eligibility, terms, documentation, pricing, and approval vary by borrower, property, market, investor, and applicable guidelines. Consult your loan officer before making employment or financial changes during the mortgage process. All loans are subject to approval. Equal Housing Lender.

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