What Not to Do When Closing on a House

When closing on a home, it's important to know what you need to do to safeguard the big day. Chinnapong/Shutterstock

Many people feel both excitement and stress when buying a home. Finding the ideal house is hard enough, but now comes the financing. There are so many details and ways to torpedo the deal.

When closing on a home, it’s important to know what you need to do to safeguard the big day. It’s equally important to know what not to do. A lot can go wrong, and it’s important to hedge your bet and not contribute to a failed closing.

Don’t Open a New Line of Credit

You don’t want to drastically change your credit before you close on a house. Lenders preapproved a mortgage based on your credit lines and finances that you had when submitting the loan application. Preapproval doesn’t mean final approval. If you change something in your finances, the lender can do so as well.

If you open a new line of credit, like a credit card or personal loan, during the process, the lender may see you as a risk. That’s because you’re taking on additional debt.

And because the credit card or other loan lender will run a credit check, you may see a temporary dip in your credit score. These are red flags to a mortgage lender and may interfere with your closing.

So, avoid applying for any credit other than your mortgage.

Don’t Buy Big-Ticket Items

Increasing your existing debt is risky. So, even though you want furniture for your new home, don’t jump the gun and buy it on your credit card before you close. If a lender sees you taking on additional debt, they may not trust you with a large mortgage. They may develop cold feet.

Running up your credit card balance could send your credit utilization rate in the wrong direction. According to Experian, your credit utilization rate is the percentage of available credit that you’re using. It could be on your credit cards or other lines of credit. For example, if you have $50,000 in credit and use $25,000, that equals a 50 percent credit utilization rate.

It’s best to only use credit cards for small purchases and quickly pay off the balance.

Avoid Closing Lines of Credit

Although you may think that closing a line of credit will help your credit score, it doesn’t. It has the opposite effect: it can hurt your credit score. Closing a line of credit reduces your credit mix and can increase your credit utilization ratio.

Even if you don’t use the credit card, its history remains. It shows you have used credit responsibly. And although this is temporary, it may interfere with your house closing.

Also avoid making large cash deposits into your bank accounts. A mortgage lender may think it’s a private loan or, worse, that it is illegitimate. Either way, it raises red flags.

Don’t Make Big Life Changes

Once question that you'll be asked by a mortgage lender is how long you’ve been at your current job. The answer is important because it denotes stability if you’ve been with the same employer for a while.

Now is not the time to switch jobs. If you must, though, make this change after you’ve closed on the loan. If it’s a great opportunity, reach out to your lender and discuss if this change will affect your closing.

Another big life change that could interfere with a closing is marriage. A change in marital status could change your mortgage application. The mortgage lender must update your application. They will have to re-review the updated debt-to-income ratio. This usually causes delays.

Don’t Switch Banks

Switching banks is a potential red flag to mortgage lenders. To a lender, it will look like you’re shuffling money around trying to hide debt that isn’t recorded. Even if you’re switching for legitimate reasons, you should communicate this to the lender so they aren’t suspicious.

Don’t Disrupt the Timeline

Although you may feel comfortable that your rate is locked in, that guarantee only lasts so long. Closing is time-sensitive. You must stay on top of the schedule by submitting your paperwork on time.

Ask your mortgage lender to give you a checklist with due dates so you are timely with your submissions. You'll also want your downpayment and money for closing costs ready. If the money is locked up in accounts that may take time to access, start working on that early.

If you don’t, you may lose the agreed terms and, worse, have to start the process over again.

Maintain Financial Stability

Maintaining financial stability is the prudent course of action when working with a mortgage lender. Avoid changes that could negatively affect the mortgage application or the lender’s confidence.

Ensure you don’t open new lines of credit or add debt to your current credit cards. This is not the time to buy that new car.

If you need to change jobs, ensure your mortgage lender knows so that it doesn’t become an issue. By having your finances stay the course, you won’t throw up any red flags that could derail your closing.

The Epoch Times copyright © 2025. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.