What not to do before closing on a house

Why lenders look again

Document age limits mean many files are refreshed before closing. Fannie Mae requires credit documents, including credit reports and income and asset records, to be no more than four months old on the note date. HUD's handbook generally limits FHA documents to 120 days old at disbursement. Fannie Mae also requires lenders to verify employment no more than 10 business days before the note date for borrowers using employment income.

Those checks are when changes come to light.

Moves that cause trouble

New credit. Fannie Mae tells lenders to examine credit inquiries to see whether they represent undisclosed debt. If you took on new debt, the lender may need to correct your application and resubmit it. Even a store card opened for a discount can trigger questions.

Big purchases on credit. Financing furniture, appliances or a car adds a monthly payment. The CFPB explains that your debt-to-income ratio compares your monthly debts with your gross monthly income. A new payment can push that ratio above your loan's limit.

Job changes. Switching employers, moving from salary to commission or becoming self-employed can change how your income is counted. Because employment is verified just before closing, a change will usually surface.

Undocumented deposits and transfers. Large deposits may need to be explained and sourced. Moving money between accounts without records, or depositing cash, can create new conditions.

Missed or late payments. A late payment can lower your score and change your loan pricing or eligibility.

If a change is unavoidable

Life happens. If you lose a job, get a raise, receive a gift or need to replace a car before closing, call your loan officer first. Lenders can often work with a change if they know about it early, document it properly and confirm you still qualify. Surprises found at the last minute are much harder to fix.

What you can do safely

• Keep paying all bills on time, ideally on autopay.
• Keep using your existing cards normally and pay them down if you can.
• Save your pay stubs and statements as they arrive.
• Answer lender requests quickly and completely.
• Plan purchases for the house, like furniture, for after closing.

After closing

Once you have signed and the loan has funded, the restrictions ease. Still, build back your savings before taking on new debt, so you have a cushion for repairs and the first year's surprises.

A simple pre-closing calendar

• As soon as you are under contract: pause any plans for new credit, and tell your loan officer about anything already in progress, such as a pending car lease or job offer.
• Through underwriting: keep pay stubs and statements as they arrive, and answer every request within a day if you can.
• In the last two weeks: expect a final employment verification and possibly a credit refresh. Keep balances steady and avoid moving money between accounts.
• Three business days out: review your Closing Disclosure and confirm your cash to close and how to send it.
• Closing day: bring what your settlement agent asks for, and keep the plan unchanged until the loan funds.

The bottom line

Between approval and closing, keep your credit, income and accounts unchanged. Avoid new credit and big purchases, keep paying on time, document any money you move and talk to your lender before any change.