Things to Avoid After You Apply for a Mortgage

10 Critical “Don’ts” After Applying for a Mortgage

Applying for a mortgage is a massive milestone, but the finish line isn’t crossed until the keys are in your hand. Between the initial application and closing day, your finances are under a microscope. Lenders perform a final “soft pull” or audit right before funding to ensure nothing has changed. Even a small shift in your financial profile can trigger a manual review, delay your closing, or result in a loan denial.

To keep your homeownership dreams on track, avoid these ten common pitfalls.

1. Don’t Switch Bank Accounts

Consistency is a lender’s best friend. When you move money between accounts or open new ones, it creates a “paper trail” nightmare. Lenders need to source every dollar; switching accounts mid-stream forces you to provide months of new statements and letters of explanation. Keep your money where it is until the deed is recorded.

2. Don’t Apply for New Credit

Whether it’s a “zero-interest” offer for a new sofa or a new credit card to earn travel points, stop. Every hard inquiry can dip your credit score, and new credit lines change your debt-to-income (DTI) ratio. As the Consumer Financial Protection Bureau notes, even small inquiries can signal risk to a lender.

3. Don’t Deposit Large Sums of “Untraceable” Cash

Found a stash of cash in a safe? While it’s great to have, depositing large, undocumented sums into your bank account is a major red flag. Lenders must follow strict anti-money laundering guidelines and FHA seasoning rules to ensure funds are yours and not a secondary undisclosed loan. If you receive a cash gift, talk to your loan officer about the proper “Gift Letter” documentation first.

4. Don’t Co-Sign for Anyone

When you co-sign, you aren’t just “helping out”—you are legally responsible for that debt. Even if you aren’t the one making the payments, the full monthly obligation will count against your DTI ratio. The Federal Trade Commission warns that this can significantly lower your borrowing power. Save the favors for after your mortgage closes.

5. Don’t Make Major Purchases

It’s tempting to buy a new car for your new driveway or appliances for your new kitchen. However, high-ticket purchases drain your cash reserves (needed for closing costs) or increase your debt. If your debt goes up, your mortgage approval could vanish. Wait until you have the keys to go shopping.

6. Don’t Change Jobs or Income Structures

Lenders look for “stability of income.” Switching from a W-2 salary to a commission-based role or becoming a 1099 contractor can reset the clock on your income history requirements. If a job change is unavoidable, notify your lender immediately so they can review U.S. Department of Housing standards regarding your new position.

7. Don’t Miss a Single Payment

Your credit score is the heartbeat of your loan. A single late payment reported during the escrow period can cause your score to plummet, potentially disqualifying you from the interest rate you locked in. Set everything to autopay and monitor your credit report to ensure your profile stays pristine.

8. Don’t Close Any Credit Accounts

You might think “cleaning up” your credit by closing old cards is helpful—it isn’t. Closing accounts can shorten your credit history and increase your credit utilization ratio, both of which can lower your score. Follow Equifax’s advice: leave your accounts exactly as they were when you applied.

9. Don’t Delay Document Requests

In the mortgage world, “no news” isn’t always good news. If your lender asks for a fresh pay stub or a specific tax schedule, provide it within 24 hours. Mortgage interest rates can expire, and delays on your end could lead to a “rate lock” extension fee or a missed closing date.

10. Don’t Assume the Deal is “Done”

The most dangerous mindset is assuming the hard part is over once the appraisal comes back. A mortgage is a moving target until the loan is funded. Stay in constant contact with your loan officer and keep your financial life “boring” and predictable until the very end.

Final Thoughts

The “quiet period” between application and closing is a test of financial discipline. Lenders want to see the exact same person at closing that they saw during pre-approval. When in doubt, ask before you act. If you’re just starting your journey, revisit our guide on the mortgage pre-approval process to ensure you’re starting on the right foot.