Mortgage Application Do’s and Don’ts to Keep Your Loan on Track

Once you apply for a mortgage, your lender looks closely at your income, credit, debts and bank accounts. That review does not stop after the initial approval. Underwriters often check your credit and employment again right before closing, so the choices you make during those weeks really matter.

Think of the time between application and closing as a quiet period for your finances. Here is how to handle it well.

Habits That Help

Start with a pre-approval

Getting pre-approved before you shop gives you a realistic price range and uncovers any issues early. It also makes your offer stronger with sellers.

Keep your job steady

Lenders like consistent income. If you are thinking about changing jobs, switching to self-employment or moving from salary to commission, talk with your loan officer first. A change mid-process can require new documents or affect approval.

Pay every bill on time

A single late payment can lower your score and change your terms. Set up reminders or automatic payments so nothing slips during a busy move.

Save for more than the down payment

Closing costs, prepaid taxes and insurance and moving expenses all need cash. Having funds set aside for these items keeps closing day from turning stressful.

Respond quickly to document requests

Keep recent pay stubs, W-2s or tax returns and bank statements easy to find. When your loan team asks for something, sending it promptly helps your loan stay on schedule.

Moves to Avoid Until After Closing

• Big purchases on credit: A new car, furniture set or electronics on a card or loan raises your debt-to-income ratio, which can reduce what you qualify for. Wait until the keys are in your hand.
• Opening new accounts: Store cards and new credit lines create inquiries and new debt that underwriters will ask about.
• Closing old accounts: It seems responsible, but closing long-standing cards can shorten your credit history and raise your utilization, both of which may lower your score.
• Taking on any new debt: That includes personal loans or financing a vacation.
• Moving money around without a paper trail: Large deposits or transfers you cannot document may have to be explained in writing and can delay underwriting. If family is helping with your down payment, ask your loan officer how to document a gift properly.
• Co-signing for someone else: Even if you never make a payment, that debt can count against you.

When in Doubt, Ask First

One more tip: be honest and complete on your application. If you have a past credit issue, a gap in employment or income from several sources, share it up front. Your loan officer can usually work with it, but surprises discovered late in underwriting are much harder to resolve.

Life does not pause while you buy a home. Cars break down and opportunities come up. The best rule is simple: before you make any major financial move, call your loan officer. A quick conversation can tell you whether it will affect your loan and, if so, how to handle it.

It also helps to understand what kind of loan you are using, since requirements differ. Our loan program comparison outlines the main options, and our first-time buyer resources are a good place to start if this is your first purchase.

Stay Steady and Close With Confidence

A mortgage application rewards patience and consistency. Keep your finances calm, keep your paperwork ready and keep your loan team in the loop. Do that, and you give yourself the best chance at a smooth closing.

Ready to get started or have a question about something mid-process? Reach out to FLO Mortgage and one of our loan officers will be glad to help.

This article is for general education and is not a commitment to lend. All loans are subject to credit approval, underwriting guidelines and program availability. FLO Mortgage, Company NMLS #1835856. Equal Housing Opportunity.