Getting pre-approved and having an offer accepted are big milestones. It is tempting to relax and start shopping for furniture. But until your loan closes, your lender is still evaluating your finances. Changes during this period can delay closing or, in some cases, put your loan at risk.
Why lenders keep checking
A pre-approval is based on a snapshot of your finances. Before closing, lenders commonly verify that the picture has not changed. That can include a fresh credit check, verification of employment and updated bank statements. If something significant has changed, the lender may need to re-evaluate your application.
Moves to avoid until closing
Talk with your lender before doing any of the following:
- Opening new credit: new credit cards, store cards or loans add inquiries and possibly new debt.
- Making large purchases on credit: a new car, furniture or appliances financed before closing can change your debt-to-income picture.
- Changing jobs: a new job, a switch to self-employment or a change in how you are paid can require more documentation or affect qualification.
- Moving large sums of money: unexplained deposits or transfers may need documentation.
- Co-signing a loan: even if someone else makes the payments, the debt may count toward your obligations.
- Missing payments: late payments on any account can affect your credit.
- Closing old credit accounts: this can affect your credit profile in ways that are hard to predict.
Keep documenting everything
Lenders often ask for updated documents as closing approaches. Save new pay stubs and bank statements as they arrive, and respond to requests quickly. If you receive a gift for the down payment, follow your lender’s instructions for documentation exactly. If you need to transfer money between your own accounts, keep records that show where it came from.
If something changes anyway
Life does not always wait for closing. If you receive a job offer, experience a change in income or face an unexpected expense, tell your lender right away. Early communication gives them time to explain what it means for your loan and what documents might help. Waiting until the last minute can make a manageable issue much harder to solve.
Plan the fun purchases for later
Make a list of what you want to buy for the new home, and wait until after closing to finance anything. Many buyers find that waiting also helps them make better decisions, since they can live in the space before choosing furniture.
The same goes for big financial commitments that are not purchases, such as starting a new lease on a car or taking on a large new subscription or service contract. When in doubt, a quick call to your loan officer before you sign anything is the simplest way to stay on track.
The weeks before closing are a time for patience and steady habits. For questions about your specific loan, contact your lender. For broader financial planning, talk with a financial advisor. If you are getting ready to buy, reach out through our contact page.
Putting It Into Practice: A Contract-to-Closing Money Checklist
The time between an accepted offer and closing can stretch for weeks. A simple checklist helps you stay steady while there is so much else to think about.
Every week until closing
- Pay every bill on time, including utilities and small accounts.
- Keep credit card balances at or below their usual levels.
- Save new pay stubs and bank statements as soon as they arrive.
- Check your email and phone for lender requests and respond promptly.
- Keep your down payment and closing funds where they are unless your lender says otherwise.
Before you sign anything new
- Ask yourself whether the agreement involves credit, a new monthly payment, or a change in income.
- If the answer is yes, or you are not sure, call your loan officer first.
- Get the lender’s response in writing if possible, especially for anything significant.
In the final week
- Expect a last check of credit or employment.
- Confirm the exact amount and method for your closing funds with the closing attorney’s office.
- Verify wiring instructions by phone using a number you know is correct.
A Worked Example: When a Small Purchase Becomes a Big Delay
Imagine a buyer under contract on a home in Cartersville. A few weeks before closing, he visits a furniture store and is offered a store credit card with a promotional discount. It seems harmless, and the discount is appealing. He opens the card and finances a living room set.
A week before closing, the lender runs a final credit check and notices the new account and its monthly payment. The lender needs to recalculate his debt-to-income ratio and request additional documentation. The extra steps take time, and closing is pushed back several days. Everything works out in the end, but the delay affects his move and the seller’s plans.
If he had waited until after closing, or called his loan officer first, the delay might have been avoided entirely.
Common Mistakes in the Final Weeks
- Assuming small accounts do not matter. Even modest new credit lines can appear on a credit check.
- Paying off debt without asking. Paying down debt sounds positive, but using funds earmarked for closing can create a shortfall. Ask your lender before making large payments.
- Depositing cash. Cash deposits can be hard to document. Talk with your lender before depositing large amounts.
- Changing how you are paid. Switching from salary to commission or to contract work can affect how your income is counted.
- Ignoring mail from creditors. An unexpected collection notice or billing issue should be addressed right away.
Questions Readers Ask
Can I use my credit card normally?
Regular, everyday use that you pay as usual is generally fine. The concern is with large new balances, new accounts, or missed payments. Ask your lender if you are unsure.
What if I am offered a better job before closing?
Tell your lender before accepting if possible. Many job changes can be managed, but the lender may need new documentation.
Can I order appliances before closing?
Choosing appliances is fine. Financing them before closing can affect your loan. Many buyers place orders after closing or pay without new credit after checking with their lender.
Does my lender check my credit on closing day?
Practices vary, but many lenders check credit or employment shortly before closing. Assume your finances will be reviewed until the loan funds.
Your lender is the best source of guidance for your specific loan, and a financial advisor can help with broader planning.
