You’re Under Contract. Put the Credit Card Down.

You’re under contract.

Inspection is scheduled. Closing is on the calendar. And now you need a couch, refrigerator and about 47 things from Amazon.

Put the credit card down.

Your mortgage approval isn’t frozen the day you go under contract.

Changes to your debt, credit, employment, income or money available for closing can potentially affect the loan before you get the keys.

That doesn’t mean you need to put your entire life on hold.

It means:

Before you make a significant financial move, make a phone call.

Why Can Your Mortgage Change Before Closing?

A mortgage is approved using a financial picture that includes things such as your income, employment, assets, debts and credit.

And that picture can be reviewed again before closing.

Fannie Mae, for example, requires lenders to confirm certain borrower employment information close to the note date and has requirements for evaluating newly discovered debt before closing.

So “I was already approved” doesn't necessarily mean a financial change no longer matters.

That's also why understanding what your pre-approval actually tells you matters before you start shopping.

Buying Furniture Before Closing? Wait.

This one gets buyers because it feels harmless.

You know which house you're buying.

You know where the couch goes.

And there's a 0% financing promotion staring at you.

But opening a new account or adding debt can change the financial profile used to qualify you for the mortgage.

The CFPB specifically advises homebuyers not to take out a car loan, make large credit-card purchases or apply for new credit in the months before buying a house.

The couch will still be there after closing.

Changing Jobs? Make the Call First.

A job change doesn't automatically kill a mortgage.

But don't assume it doesn't matter either.

Changing employers, changing how you're paid, moving from salary to commission, reducing hours or becoming self-employed can affect how income is evaluated.

If a job opportunity comes up while you're under contract, call your mortgage professional before you make the change when possible.

We can look at what the change means for your specific loan instead of finding out after it happens.

Moving Money Around? Ask First.

Transferring money between your own accounts isn't automatically a problem.

But when funds are being used for a mortgage transaction, the lender may need to document where certain money came from.

The same principle applies if someone is giving you money for the purchase.

Moving the money first and explaining it later can create unnecessary work.

And Please Keep Paying Your Bills

Closing on a house is not the time to forget the car payment.

A new late payment or other negative change to your credit profile before closing can matter.

Keep making your normal payments on time and avoid assuming you're finished with the mortgage process simply because you've already been pre-approved or received an initial approval.

Before Closing, Use One Simple Rule

Thinking about:

Buying the furniture?

Financing the car?

Opening a new credit card?

Changing jobs?

Moving a large amount of money?

Accepting money from someone else?

Call first.

Sometimes the answer may be:

“That's fine.”

Sometimes we may need to document something.

And sometimes waiting until after closing may be the cleaner option.

I'd much rather answer the question before the decision than troubleshoot the decision afterward.

The Better Question

Don't ask:

“Am I allowed to do anything before closing?”

Ask:

“Could this change anything my mortgage approval is based on?”

You don't need to be afraid to touch your money for the next month.

You just don't want to accidentally change the financial picture we're using to get you to the closing table.

What's the strangest thing you've heard someone say you shouldn't do before closing? Tell me in the comments.

If you're buying a home and aren't sure whether a financial change could affect your mortgage, ask before you make the move.

Schedule a Mortgage Strategy Call

Information is for educational purposes only and is not a commitment to lend or financial advice. The effect of changes to credit, debt, employment, income, assets or other financial circumstances depends on the borrower, loan program, lender and transaction. All loans are subject to credit approval, program guidelines, property eligibility and underwriting requirements.