QUICK ANSWER
Why avoiding mistakes matters
In the weeks and months leading up to a home purchase, every financial decision you make can either strengthen or weaken your mortgage application. Experts interviewed by The Mortgage Reports stress that buyers often sabotage themselves by taking on new debt, maxing out credit cards, changing jobs or making big purchases before closing. These moves can push your debt-to-income ratio too high or tank your credit score, causing lenders to deny your loan at the last minute. To protect your approval, keep your finances stable, avoid large credit changes and follow the seven don’ts outlined below.
Here are five specific actions that can derail your mortgage between pre-approval and closing, each with its real consequence:
Opening a new credit card. Even if you are not using it, a new account drops your credit score by 5 to 10 points due to the hard inquiry and reduces the average age of your accounts. In some cases it pushes your score below a lender's threshold, changing your rate or disqualifying you from the loan program you applied for.
Co-signing a loan for someone else. When you co-sign, that debt counts as your own in your debt-to-income ratio. If the monthly payment on the co-signed loan pushes your DTI over the lender's limit, your mortgage is in jeopardy regardless of whether you are actually making that payment.
Making large cash deposits that cannot be documented. Lenders are required to source every deposit over a certain threshold. Cash gifts from family, reimbursements, or any other non-payroll deposit needs a paper trail. An undocumented large deposit flags as potential undisclosed debt and can stall underwriting for weeks.
Quitting or changing jobs during underwriting. Your loan is approved based on your current employment and income. A job change, even a lateral one, restarts parts of the verification process. Changing to self-employment is almost always fatal to a loan in progress because lenders require two years of self-employment history to count that income.
Making a major purchase on credit. A new car payment or a credit card balance for furniture you bought "for the new house" changes your DTI and can change your rate or disqualify you mid-process.
One South Carolina-specific note: most lenders in SC run a soft pull on your credit 24 to 48 hours before closing. These rules are not just for the period between offer and approval. They apply until you have the keys.