Why You Shouldn't Make Major Financial Changes Before Closing
You found the house.
Your offer was accepted.
The inspection is done.
The appraisal is moving along.
You're already mentally arranging furniture and figuring out which wall is getting the TV.
At this point, it feels like the hard part is over.
So naturally, this seems like the perfect time to finance a new couch, buy a truck, move $30,000 between accounts, quit your job, and open three credit cards.
Please don't.
Getting pre-approved doesn't freeze your financial picture in time.
Your mortgage approval is based on the income, employment, credit, debts, and assets we've reviewed. Some of those items can be checked again before closing.
If something materially changes, your loan may need to be reevaluated.
Most of the time, avoiding problems is pretty simple:
Before making a significant financial change, call your lender.
A five-minute conversation can save us from a very uncomfortable one later.
Your Pre-Approval Is Based on a Snapshot of Your Finances
When you're pre-approved, we're looking at a specific financial picture.
Your employment.
Your income.
Your credit.
Your monthly debts.
Your available assets.
The money you're planning to use for closing.
That information helps determine whether you qualify and how the loan should be structured.
Then you go under contract.
Now we have to get that same financial picture all the way to closing.
That doesn't mean you can't spend a dollar or live your life for the next 30 days.
You can still buy groceries.
You can still go to dinner.
You don't need permission to order something from Amazon.
I'm talking about financial decisions significant enough to change the information we used to approve your mortgage.
Those deserve a conversation first.
Don't Open New Credit Without Talking to Your Lender
You're buying a house.
Suddenly every retailer in America wants to help you furnish it.
"0% financing for 24 months!"
"Open a card today and save 20%!"
"Don't pay until next year!"
I understand the temptation.
The problem is that new credit can affect your mortgage qualification.
A new account may create a new monthly payment.
A credit inquiry may affect your credit profile.
Additional debt can change your debt-to-income ratio.
And if we're working with a tight qualification to begin with, what seems like a harmless furniture purchase could create a real issue.
The couch will still be there after closing.
I promise.
Definitely Don't Buy a Car
This one deserves its own section because I've seen it more than once.
Please don't buy a car while you're under contract without talking to your lender first.
A new $700 monthly car payment isn't just a $700 car payment.
It's $700 of additional monthly debt that may now need to be included in your mortgage qualification.
That can materially reduce how much mortgage you qualify for.
Even if you trade in an existing vehicle, we still need to understand exactly what happened to the old loan and what the new obligation looks like.
"But Mark, I already signed for it."
Those are words I'd prefer not to hear three days before closing.
If your car dies and you genuinely need another one, call me.
Life happens.
We can look at the numbers and determine what you can safely do before you sign anything.
Don't Run Up Your Credit Cards
You don't necessarily have to open a new account to create a problem.
Existing balances matter too.
Let's say you were approved with relatively low credit card balances.
Then you spend $12,000 furnishing the new house before closing.
Your balances increase.
Your required minimum monthly payments may increase.
Your credit utilization may change.
Your credit score could be affected.
Your debt-to-income ratio could change.
Maybe your loan still works perfectly fine.
Maybe it doesn't.
I'd rather not find out by surprise.
Wait until after closing to turn the house into a West Elm catalog.
Don't Close Credit Accounts Either
This one surprises people.
You might think:
"I'm buying a house. Let me clean up my credit and close these old cards I don't use."
Good intention.
Potentially bad timing.
Closing an account can affect your overall credit profile, including the amount of available revolving credit you have.
That could potentially affect your credit scores.
During the mortgage process, boring is good.
We aren't trying to reinvent your finances between contract and closing.
If there's something on your credit you want to change, let's discuss it first.
Don't Start Moving Large Amounts of Money Around
Another common mistake is reorganizing bank accounts right before closing.
Maybe you're moving money from savings to checking.
Maybe you're consolidating accounts.
Maybe you're transferring funds from an investment account.
Maybe Mom and Dad are helping with the down payment.
Maybe you're receiving proceeds from selling something.
None of those things are automatically a problem.
But depending on the loan and circumstances, we may need to document where funds came from and how they moved.
When money starts bouncing through four different accounts, the paper trail gets more complicated than it needed to be.
If you know you're going to need $25,000 from one account for closing, ask us how we'd like you to handle it before moving the money.
Simple is your friend.
Be Careful With Large Deposits
You sell a motorcycle for $8,000.
Your parents give you $15,000.
You receive a large bonus.
You move money from a business account.
You deposit cash you've been saving at home.
Again, the issue isn't necessarily that you received money.
The issue is whether those funds need to be documented and whether they can be used for the transaction under the applicable loan guidelines.
Cash is especially problematic because proving where physical cash came from can be difficult.
Your mortgage file likes paper trails.
Cash in an envelope doesn't have much of one.
If you're expecting a large deposit before closing, tell us before it hits the account you're using for the transaction.
We'll help you determine the cleanest way to handle it.
Don't Accept Gift Funds Without a Plan
Gift funds can be perfectly acceptable for many mortgage programs.
But there are rules around who can provide the gift, how it needs to be documented, and how the funds are transferred.
So if your parents generously offer:
"Here's $20,000 for the house."
Great.
Thank them.
Then call us before everyone starts moving money.
We can walk you through the correct process for your specific loan.
The gift isn't the problem.
A poorly documented gift can become one.
Please Don't Change Jobs Without Calling Me
Changing jobs doesn't automatically kill a mortgage.
Let me say that again because this is another area where people panic unnecessarily.
A job change is not automatically a problem.
But it can absolutely affect the loan.
The impact depends on things like:
How you're paid.
Whether you're staying in the same line of work.
Whether you're moving from salary to commission.
Whether there is a gap in employment.
When the new job starts.
Whether we can document the new employment and income appropriately.
What loan program we're using.
For example, moving from one salaried position to another salaried position may be very different from leaving a salaried job to become self-employed.
So if an amazing career opportunity comes along while you're buying a house, I'm not going to tell you to ruin your career for your mortgage.
Call me.
Let's figure out how the job change affects the financing before you submit your resignation.
Don't Change How You're Paid Without Telling Us
This one can be more subtle.
Maybe you're staying with the same employer but changing roles.
Your salary becomes commission.
Your guaranteed hours change.
You move from W-2 employment to a 1099 arrangement.
You reduce your hours.
You move from full-time to part-time.
You start receiving a larger portion of your compensation through bonuses or variable income.
From your perspective, you may still be making the same amount of money or even more.
From a mortgage qualification standpoint, the way income is earned and documented matters.
A higher earning potential doesn't necessarily mean all of that income can immediately be used for qualification.
Tell us before the change if you can.
Don't Quit Your Job
I wish this one didn't need a section.
It does.
Your employment can be verified again during the mortgage process, including near closing.
If your approval depends on your employment income and you no longer have the job producing that income, we have a problem.
Closing on Friday?
Monday is not the ideal day to begin your surprise sabbatical.
If you're planning a career change, retirement, leave of absence, or anything else that could affect employment, we need to know.
Don't Co-Sign for Someone Else
Your brother needs a car.
Your daughter needs an apartment.
Your best friend needs help getting approved for something.
You want to help.
I get it.
But co-signing means you're taking on a financial obligation.
From a mortgage standpoint, that new debt may need to be considered when determining your qualification.
It doesn't matter that your brother promises he'll make every payment.
The lender has to evaluate the legal obligation you just accepted.
Help your family.
Just maybe don't surprise your mortgage underwriter with it.
Don't Apply for Another Mortgage
This sounds obvious until it isn't.
Sometimes buyers are also considering an investment property, vacation home, land purchase, or another real estate transaction.
If you're taking on another mortgage or real estate obligation, tell us.
That can affect:
Your available assets.
Your reserves.
Your debt-to-income ratio.
Your credit.
Your qualifying income.
The occupancy and structure of the loan we're already working on.
Real estate investors especially need to be careful here.
If you're actively buying multiple properties, your lender should know what else is happening.
Don't Spend the Money You Need for Closing
This seems obvious.
But it's worth discussing.
If we've calculated that you need $28,000 for closing and you currently have $32,000 available, you probably shouldn't spend $10,000 of it on something else.
Even if the mortgage approval itself doesn't change, we still need you to have enough verified funds to complete the transaction.
And ideally, I don't want you arriving at closing with exactly enough money to get through the door and nothing left afterward.
Homeownership comes with expenses.
Keeping some liquidity matters.
[Learn more: How Much Money Do You Really Need to Buy Your First Home?]
Don't Assume Your Final Cash to Close Will Be the Exact Same as the First Estimate
Early numbers are estimates.
As the transaction progresses, we receive more accurate information.
The homeowners insurance premium gets finalized.
Title provides updated figures.
Property taxes are calculated.
Seller credits are confirmed.
The closing date gets finalized.
HOA-related costs may come in.
Your final cash to close may move.
That's normal.
So if you have exactly the amount from the first estimate sitting in your bank account and you're planning to spend everything else, don't.
Keep a cushion.
I'd much rather tell you that you need less than expected than call you asking where we're finding another $2,500.
[Learn more: Understanding Closing Costs: Where Does All That Money Go?]
Don't Make Unusual Financial Moves Because Someone Online Told You To
Mortgage advice on the internet is fascinating.
Some of it is excellent.
Some of it makes me wonder whether the person giving it has ever actually closed a mortgage.
If you're under contract and someone tells you to:
Pay off every credit card.
Close old accounts.
Move all your money.
Dispute something on your credit.
Open a new card to improve your score.
Take out a personal loan.
Add yourself to someone's account.
Don't just do it.
Ask your lender first.
There may be situations where one of those actions makes sense.
But mortgage files are specific.
Advice that helped one person can create a problem for someone else.
What If You Already Made a Change?
Tell us.
Quickly.
Don't hide it and hope nobody notices.
If you bought the car, changed jobs, opened the credit card, moved the money, or made some other financial change, the best thing you can do is tell your lender.
Maybe it doesn't affect anything.
Maybe we need additional documentation.
Maybe we need to restructure the loan.
Maybe we need to solve a problem.
Problems are much easier to solve when we know they exist.
The worst time for me to learn about a major financial change is when the underwriter finds it before I do.
Does This Mean You Can't Touch Your Money Until Closing?
No.
Please live your life.
Pay your bills.
Buy groceries.
Go to dinner.
Keep making normal purchases.
We're not putting your checking account into witness protection.
The point is simply to avoid significant changes without understanding how they affect your mortgage.
If you're wondering whether something counts as "significant," that's probably a good reason to ask.
Keep Your Financial Picture Boring
That's my favorite advice between pre-approval and closing.
Boring is good.
Keep making your payments on time.
Keep your credit card balances under control.
Keep your job.
Keep your closing funds where we can document them.
Don't apply for unnecessary credit.
Don't make unexplained financial moves.
And if something does need to change, call us first.
You don't need to memorize mortgage underwriting guidelines.
That's what we're here for.
Why This Matters Even After You've Been "Approved"
Buyers sometimes hear that their loan is approved and assume nothing else can affect it.
Mortgage approvals can have conditions.
Information may need to be updated.
Employment may be reverified.
Assets may need to be reverified.
Credit-related changes can potentially come into play.
The loan still has to satisfy the applicable requirements through closing.
That's why I don't treat pre-approval as the finish line.
The goal is to get you from pre-approval all the way through closing with as few surprises as possible.
[Learn more: Mortgage Pre-Qualification vs. Pre-Approval: What's the Difference?]
The Five-Minute Rule
Here's the easiest way to remember all of this.
If you're under contract and you're about to do something significant involving:
Credit.
Debt.
Employment.
Income.
Assets.
Or the money you're using to buy the house.
Call me first.
You don't need to know whether it's allowed.
You don't need to Google it.
You don't need to ask your cousin who bought a house in 2019.
Just call.
Five minutes before the decision is a lot easier than five hours trying to fix it afterward.
One Last Thing
My goal isn't to make your life difficult while you're buying a home.
It's the opposite.
Most mortgage emergencies aren't actually emergencies when they're identified early enough.
A job change can often be planned for.
A gift can be documented correctly.
Money can be transferred the right way.
Debt can be evaluated before it's taken on.
The problem usually isn't the question.
It's the surprise.
So once you're under contract, keep your finances boring and keep us in the loop.
We'll handle the mortgage.
You can worry about the important stuff.
Like whether that sectional actually fits through the front door.
If you're thinking about buying your first home in Dallas-Fort Worth or anywhere in Texas, I'm happy to help you build the financing plan before you start shopping.
We'll look at your qualification, your comfortable payment, your cash needed, and any potential issues upfront so there are fewer surprises once you find the house.
You can learn more about my team, read our client reviews, or start a secure application at:
About Mark Karetskiy
Mark Karetskiy
Mortgage Strategist | Branch Leader | Loan Originator
Movement Mortgage
NMLS #1254891
Licensed in TX, NM, CA & OH
Mark Karetskiy is a Mortgage Strategist with Movement Mortgage serving homebuyers, homeowners, veterans, and real estate investors. With more than twelve years in the mortgage industry and hundreds of families served, Mark focuses on strategic mortgage planning, creative financing solutions, and helping clients understand how their mortgage fits into their bigger financial picture.
Whether it's buying a first home, using VA benefits, financing an investment property, refinancing, or solving a complicated scenario, his approach is simple: educate first, communicate clearly, and structure the financing around the client's goals instead of just selling a rate.
Movement Mortgage is licensed in all 50 states, giving Mark and his team the ability to help clients and referral partners with mortgage financing nationwide.
Work: 469-202-4195
Cell: 857-544-3158
Office: 5840 Legacy Circle, Ste 250, Plano, TX 75024
Website: www.LoanOfficerMark.com
Book a Consultation: www.calendly.com/loanofficermark
Continue Learning
[Buying Your First Home: A Step-by-Step Guide from Pre-Approval to Closing]
[Mortgage Pre-Qualification vs. Pre-Approval: What's the Difference?]
[How Much House Can I Actually Afford?]
[How Much Money Do You Really Need to Buy Your First Home?]
[Understanding Closing Costs: Where Does All That Money Go?]
[Purchase Price vs. Seller Concessions: Which Should You Negotiate?]
[FHA vs. Conventional Loans: Which Is Better for a First-Time Buyer?]
[Why the Lowest Mortgage Rate Isn't Always the Best Mortgage]