7 Things To Avoid After Applying for a Mortgage

Yay! You just found the perfect home you’ve been searching for, and are ready to move forward with financing and inspections. These are exciting times, for sure. We know you can’t wait to decorate your place with fun coastal furniture and decor. 

But wait! Don’t make any major purchases just yet…



Below is a list of 7 Things You Shouldn’t Do After Applying for a Mortgage! Some may seem obvious, but some may not.

Don’t Do These 7 Things Before Mortgage Approval 

1. Don’t change jobs.

Your loan officer must be able to track the source and amount of your annual income. Avoid changing from salary to commission or becoming self-employed during this time as well.

2. Don’t deposit cash into your bank accounts. 

Lenders need to source your money and cash is hard to trace. Before you deposit any amount of cash into your accounts, discuss the proper way to document your transactions with your bank.

3. Don’t make any large purchases…

…like a new car or new furniture for your new home. This may seem obvious, but new debt obligations create new qualifications. People with new debt have higher debt to income ratios, and higher ratios make for riskier loans. Sometimes, qualified borrowers no longer qualify.

4. Don’t co-sign other loans for anyone. 

When you co-sign on a loan, you are obligated. As we mentioned, with that obligation comes higher ratios as well. Even if you swear you will not be the one making the payments, your lender will have to count the payment against you.

5. Don’t change bank accounts. 

Remember, lenders need to source and track assets. That task is significantly easier when there is consistency among your accounts. Before you even transfer money between accounts, talk to your loan officer.

6. Don’t apply for new credit. 

It doesn’t matter whether it’s a new credit card or a new car. When you have your credit report run by organizations in multiple financial channels (mortgage, credit card, auto, etc.), your FICO score will be affected. Lower credit scores can determine your interest rate and maybe even your eligibility for approval.

7. Don’t close any credit accounts. 

Many clients have erroneously believed that having less available credit makes them less risky and more likely to be approved. Wrong. A major component of your score is your length and depth of credit history (as opposed to just your payment history) and your total usage of credit as a percentage of available credit. Closing accounts has a negative impact on both those determinants of your score.

Again, consult your loan officer. They will be able to tell you how your decision will impact your home loan. They are there to guide you through the mortgage process, just like we are here to guide you through the home buying process. 

Need lender recommendations? We’d be happy to share a list of local lenders that know our market well. Email us [email protected].