7 Things Not to Do During the Mortgage Process

By Mark Callender

Hello, my name is Mark Callender and I am a licensed real estate agent with RE/MAX Results. Because I have been helping families buy and sell their homes for more than 18 years, I am now helping their children to buy their first homes and their parents to downsize. No matter the direction you’re moving, my goal is to make the process as calm and enjoyable as it can be.

Getting preapproved for a mortgage is an important step, but it’s not the finish line. Many buyers don’t realize that the steps you take between preapproval and closing can make or break your deal. Your lender is still monitoring your financial profile the entire time, and certain moves will raise red flags that can delay or completely derail your loan.

The best thing you can do is talk to your loan officer before making any financial decisions during this period. Here are seven things to avoid after getting preapproved.

1. Do not change jobs. A job change during the mortgage process can throw off your entire application, even if the new job pays more.

2. Do not change your pay structure. Going from salaried to commission, switching from full-time to contract, or any other income structure change can impact whether you still qualify for the loan. Your lender approved you based on your current income picture, and changing that picture changes the math.

3. Do not apply for new credit. No new credit cards, no financing furniture, no car payments. All of it affects your credit score and your debt-to-income ratio.

4. Do not deposit large sums of money. A big deposit that doesn’t match your normal income pattern raises questions that your lender will need answered.

5. Do not dispute credit items. Filing a dispute during the mortgage process can freeze that account on your credit report and complicate your underwriting.

6. Do not skip payments on any loans. Stay current on everything. One missed payment can drop your score and create a red flag right before closing.

7. Do not move gift funds incorrectly. If a family member is giving you money toward your down payment, that money is considered a gift, not a loan. There’s a specific way gift funds need to be documented and transferred, and moving them incorrectly can trigger questions from your lender that delay closing.

Your preapproval is based on a financial snapshot, and if that snapshot changes between now and closing, your lender has to re-evaluate. That re-evaluation doesn’t always go in your favor. We put together a one-page guide with all seven of these so you can keep it handy.

If your loan officer isn’t telling you these things upfront when you apply, you may want to get a second opinion from a different mortgage professional.

If you have questions about the mortgage process or you’re getting ready to buy a home in the Twin Cities, reach out to us. Call or text us at (612) 961-9448 or email us at mark@markcallenderhomes.com. You can also visit callenderhometeam.results.net for more. We’re always here to help you through it.