5 Financing Mistakes That Can Delay Your Closing

You're under contract on your dream home. Here's how to help keep your mortgage on track.

Congratulations — you've found the perfect home, your offer has been accepted, and you're one step closer to getting the keys.

But did you know that some of the most common mortgage delays happen after buyers are already under contract?

Even borrowers who have been preapproved can experience unexpected challenges during underwriting. Whether you're purchasing your first home or you're a real estate agent guiding clients through the process, understanding these five common financing mistakes can help you avoid unnecessary delays.

1. Making Large Purchases Before Closing

It's exciting to start shopping for furniture, appliances, and everything you'll need for your new home. However, making large purchases before closing could affect your mortgage approval.

Financing a new vehicle, opening a furniture credit account, or increasing your credit card balances may change your debt-to-income ratio or credit profile.

Even if you've already received a preapproval, your lender may review your credit and financial obligations again before closing.

The solution: Avoid taking on new debt or making significant purchases without first discussing them with your mortgage professional.

2. Changing Jobs or Income

Your employment and income are important parts of your mortgage qualification.

Changing employers, switching from salaried employment to self-employment, reducing your working hours, or changing your compensation structure during the loan process can create additional underwriting requirements.

A job change doesn't automatically mean your loan will be denied, but it may require additional documentation or affect your qualifying income.

The solution: If you're considering an employment change, speak with your mortgage professional before making the transition.

3. Moving Money Between Accounts Without Documentation

Mortgage lenders are required to verify the funds used for your down payment, closing costs, and — when applicable — reserves.

Large deposits, transfers between accounts, or funds received from family members may require additional documentation.

For example, if you transfer money from an investment account to your checking account, your lender may need statements documenting the source and movement of those funds.

The solution: Keep your financial records organized, avoid unnecessary transfers, and notify your lender before moving substantial amounts of money.

4. Opening or Closing Credit Accounts

Your credit profile plays an important role in your mortgage qualification.

Applying for new credit, opening additional accounts, or making significant changes to existing credit accounts can affect your credit score and monthly debt obligations.

Even closing an existing credit card may have an unintended effect on your credit profile.

The solution: Maintain your existing credit accounts, continue making payments on time, and discuss any proposed changes with your lender before closing.

5. Waiting Too Long to Provide Requested Documents

One of the easiest ways to avoid unnecessary closing delays is to respond promptly to documentation requests.

During underwriting, your lender may request updated bank statements, employment verification, letters of explanation, or additional property documentation.

Waiting several days to provide requested information can affect underwriting timelines, closing disclosures, and your scheduled closing date.

The solution: Stay in regular communication with your mortgage professional and submit requested documents as soon as possible.

Your Before-Closing Checklist

Use this checklist as you prepare for closing:

• Avoid opening new credit accounts or taking on additional debt
• Discuss employment or income changes with your lender
• Keep funds for closing documented and accessible
• Continue paying all existing obligations on time
• Respond promptly to requests from your mortgage team
• Avoid major financial changes without discussing them with your lender
• Confirm your closing funds and wire instructions through a verified phone number

Important: Always independently verify wiring instructions to protect against real estate wire fraud.

For Real Estate Agents: Communication Is Key

As a real estate agent, you play an important role in helping your clients reach the closing table.

Setting expectations early and maintaining open communication with your client's mortgage professional can make a significant difference.

Encourage your buyers to avoid major financial changes, respond promptly to lender requests, and communicate any changes in their employment or financial situation.

Working with an experienced mortgage professional who understands underwriting requirements and communicates throughout the transaction can help identify potential issues before they affect closing.

The Bottom Line

Getting preapproved is an important first step — but maintaining your financial qualifications throughout the loan process is equally important.

The fewer unexpected financial changes you make between preapproval and closing, the easier it is for your mortgage team to keep your loan moving forward.

Let's Get You to the Closing Table

With over 30 years of mortgage industry experience, I understand how important communication, preparation, and attention to detail are throughout the lending process.

Whether you're purchasing a home or you're a real estate agent helping your clients navigate their financing, I'm here to help make the mortgage process as smooth as possible.

Real estate agents: Have a buyer who needs preapproval or has questions about the mortgage process? Let's work together to help them prepare for a successful closing.

Contact me today to discuss your mortgage needs.