Buying a home is exciting, but the final step—the mortgage closing process—can feel overwhelming. Even after you’ve been preapproved and found your dream home, your home loan isn’t fully secured until you’ve signed the final documents. Unfortunately, common financial missteps can disrupt the process, delay your closing, or even put your home loan approval at risk. To keep everything on track, it’s crucial to understand the top mortgage mistakes to avoid before closing.

Why the Final Stretch Matters

Mortgage lenders continue reviewing your financial activity right up until closing day. They often recheck your credit, verify employment, and review your debt-to-income ratio (DTI) before funding your loan. Any changes to your financial profile—intentional or not—can affect your approval or alter your loan terms.

Big Purchases Can Hurt Your Approval

As you prepare to move into your new home, it’s tempting to buy furniture, appliances, or even a new car. However, using credit for large purchases increases your overall debt and lowers your credit score. These changes directly impact your DTI and can make your profile riskier to lenders.

Even if you’ve already received conditional loan approval, your lender might require new documentation if your credit score drops. Hold off on non-essential spending until the loan closes.

Credit Activity Should Stay Stable

Another mistake many homebuyers make is opening or closing credit accounts during the mortgage process. This alters your credit utilization, a major factor in your credit score. Additionally, closing an account can reduce your available credit, which can also lower your score unexpectedly.

Before closing, avoid applying for new credit cards, personal loans, or store financing. Lenders are looking for consistency. Sudden shifts in your credit profile could raise red flags, even late in the process.

Employment Changes Could Delay Your Loan

Lenders verify your employment and income again before closing, which means job changes can complicate things. If you switch jobs, take unpaid leave, or lose income during this period, your lender may require additional documentation—or worse, pause the approval.

Unless the opportunity is urgent or unavoidable, it’s best to wait until after closing to change jobs. A steady income and employment history help reassure the lender that you’re able to repay your mortgage.

Avoid Taking on New Debt or Co-Signing Loans

Even if you’re helping a family member by co-signing a loan, doing so adds debt to your profile. This affects your back-end DTI ratio, which includes all your monthly debt obligations. If your DTI exceeds the lender’s allowable limit, they might reduce your loan amount or delay closing altogether.

Focus on maintaining a clean financial profile during this time. Don’t take out new loans or increase existing balances unless absolutely necessary.

Missed Payments Can Derail Your Loan

In the hustle of homebuying, it’s easy to overlook a bill. However, late or missed payments can cause your credit score to drop quickly. Most lenders perform a final credit check before closing, and even one late payment can impact your interest rate—or worse, disqualify you.

Set up autopay for all recurring bills during the mortgage process. This helps you stay on schedule and protects your credit score.

Respond Quickly and Meet All Deadlines

Timely communication is key to a smooth mortgage process. Every stage of underwriting and closing is time-sensitive. If your lender requests documentation—such as bank statements, pay stubs, or signed disclosures—submit them as soon as possible. Delays in paperwork can push your closing date back or cause unnecessary complications.

One of the most important documents you’ll receive is the Closing Disclosure. This outlines your final loan terms and must be reviewed and acknowledged at least three business days before closing. Ignoring or missing this step could force a reschedule.

What Happens Right Before Closing?

In the final days before your loan closes, you’ll:

• Receive and acknowledge your Closing Disclosure
• Complete a final walkthrough of the home
• Bring a cashier’s check or wire funds for your closing costs
• Meet with a notary and title company to sign the final documents

Once your lender verifies everything and funds the loan, the title company will disburse the money and you’ll officially become a homeowner.

Stay Focused and Avoid Costly Mistakes

Consistency is key. Avoid changing your financial situation, don’t open new credit lines, and communicate promptly with your lender. These simple steps will help prevent mortgage mistakes and ensure your home loan closes on time.

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