You’ve done your homework and found the right home to purchase after lots of searching. You’ve also applied to for a mortgage and are ready to settle. However, you still need to be cautious until you get the keys to the house. Stay vigilant about your finances and do not make any huge lifestyle changes.


It’s important to stay in touch with your mortgage officer and to not make any important changes than can impact your credit score and alter your initial qualifications. It’s better to err on the side of caution so that you don’t harm your chances of buying your dream house. To help you, we’ve provided a list of things you should avoid in order to ensure smooth processing of your housing loan application.

After applying for a mortgage, you should refrain from buying expensive jewelry, furniture, appliances, luxurious items, or a car on credit. It’s no doubt exciting to purchase new decorations and items for your new home, but these expenses can add up. New debt will mean fresh monthly payment obligations which can increase your DTI (debt-to-income) ratio and make your loans riskier. The ratio change could nullify your previous better qualification for the home loan.


Work history is a significant factor that is considered by lenders when they are reviewing a mortgage application. A lender would verify your past jobs and also assess your latest two employment years. This to ensure that your income source is reliable and can enable you to make the loan repayment.


Lenders will also track alterations to your yearly income. Therefore, do not change jobs or alter your payment modes, especially if your income is salary based. Also, do not take up self-employment during this period. If you get a good job offer that will boost your career, ensure that the new opportunity is in the same sector and get solid facts to justify your job change to the lender.


Do not apply for new types of credit, such as a credit card. Your credit score can get impacted if your personal credit is run by multiple financial channels, including credit cards, auto, or mortgage. A lower credit score can affect your originally approved interest rate, and could also impact your loan eligibility.


During the home loan application process, do not terminate any of your personal credit accounts. Your credit history has big impact on your credit score and lenders use it to learn if you’ve been making timely payments over the long term.


Do not think that keeping a large amount of money in your bank accounts can make you better qualified for a housing loan. In fact, it can spoil your chance of getting a mortgage approval. It is difficult to trace cash and the lender will need to source your funds. If your deposit is unexplained, the lender may conclude that you got a cash advance or loan to add funds to your bank account.


Find out from the loan officer how to properly document your financial transactions. If you are keeping large cash for emergencies, or are expecting to get a big sum, keep strong proof (in hand) about the source of the money. Also, avoid trouble by having copies of term deposits as proof when required.


Co-signing indicates your agreement to pay the other party’s debts if that individual does not make payments on time for any reason. While this act is generous, specifically if it helps a friend or family member, it still makes you obligated.


For successful mortgage approval, avoid co-signing at all costs as lenders do not view it favorably. In the worst case, the borrower may fail to make the loan payment and the lender will make you accountable for the payment. This means you’ll have to pay that loan along with your mortgage. No lender will be ready to accept such a big financial risk.