What Not to Do After Getting Pre-Approved (These Mistakes Can Kill Your Deal)

Getting pre-approved is a big milestone. It means a lender has reviewed your finances and confirmed you're ready to buy. But a lot of buyers don't realize that pre-approval isn't a guarantee. Your loan is verified again right before closing, and if your financial picture has changed, your approval can be pulled.

It happens more than people think. And almost every time, it was preventable.

Here are the most common mistakes buyers make between pre-approval and closing, and why each one is a problem.

Opening New Credit Accounts

This is the most common mistake and one of the most damaging.

When you apply for a new credit card, auto loan, personal loan, or any other form of financing, a hard inquiry gets added to your credit report. Hard inquiries lower your credit score. A new account also lowers your average account age, which can drop your score further.

If your score drops enough after pre-approval, you may no longer qualify for the same loan terms. In some cases you may no longer qualify at all.

It doesn't matter if the offer is a 0% promotional card or a store account you've had before. Do not open new credit between pre-approval and closing. Not for furniture. Not for appliances. Not for anything.

Making Large Purchases on Credit

Even if you're using a credit card you already have, running up a large balance before closing is a problem.

Here's why. Your debt-to-income ratio is calculated using the minimum monthly payments on all your open accounts. If you put $8,000 on a credit card to buy furniture for the new house, the minimum payment on that balance gets counted in your DTI. That could push your ratio over the limit and affect your approval.

Underwriters verify your credit right before closing. If new balances show up that weren't there at pre-approval, they need to be explained and factored in. In the worst case, they push you over the limit and your loan doesn't close.

Buy the furniture after you close.

Changing Jobs or Quitting

Employment stability is one of the things lenders care about most. If you change jobs between pre-approval and closing, your lender needs to know immediately.

A job change isn't automatically a deal-killer, but it can complicate things significantly depending on the circumstances:

Changing to a similar role at a new company for more money in the same field is usually manageable. Changing industries, going from salaried to hourly, moving to a commission-based role, or going self-employed can all create problems because lenders treat different income types differently. Commission and self-employment income typically require a two-year history before it can be used to qualify.

Quitting without another job lined up will almost certainly kill your loan.

If a job change is unavoidable during this period, tell your mortgage broker before it happens. There may be ways to structure things that minimize the impact, but only if you communicate early.

Moving Money Between Accounts

This one surprises a lot of buyers. Lenders need to document and source every dollar going toward your down payment and closing costs. When money moves between accounts without a clear paper trail, it creates what underwriters call "unsourced funds," and those funds can't be used for closing until they're fully documented.

A transfer from your savings to your checking account seems harmless. But if your bank statements show a large deposit with no obvious explanation, the underwriter is going to ask where it came from. You'll need to provide statements from the originating account showing the transfer. If that account has its own unexplained deposits, those get questioned too.

This doesn't mean you can't move money. It means you need to be thoughtful about it and keep records of everything. When in doubt, ask your mortgage broker before you move funds.

Depositing Large Amounts of Cash

Cash deposits are one of the trickiest documentation issues in mortgage lending. Lenders need to verify that your funds are yours and didn't come from an undisclosed loan or other source that would affect your DTI.

Cash is hard to trace. If you deposit a large sum of cash into your account, your lender may not be able to use those funds for your transaction because they can't verify the source. This can leave you short on what you need to close.

If someone is giving you money toward the purchase, make sure it goes through the proper gift fund process with the correct documentation for your loan type. Your mortgage broker can walk you through exactly how to handle it.

Making Late Payments

Your payment history is the single biggest factor in your credit score. A 30-day late payment can drop your score significantly and may need to be explained in writing to the underwriter.

During the period between pre-approval and closing, pay every bill on time. That means credit cards, car payments, student loans, utilities, and especially your current rent or mortgage if you have one. A pattern of on-time payments protects your score and keeps your file clean.

Co-Signing on Someone Else's Loan

When you co-sign a loan for another person, that debt shows up on your credit report. The payment gets counted in your DTI whether you're making the payment or not. Depending on the amount, this alone can push you over the limit and affect your ability to close.

Do not co-sign for anyone between pre-approval and closing. This includes car loans, personal loans, student loans, and anything else. It can wait.

Making Large Unexplained Withdrawals

Lenders also look at money leaving your accounts, not just coming in. Large withdrawals right before closing can raise questions about whether your remaining funds are sufficient and whether the withdrawn money went somewhere that affects your loan.

Keep your account activity as clean and predictable as possible during this period.

Not Telling Your Mortgage Broker About Life Changes

Things happen. Job changes, unexpected expenses, family situations, health issues. The mistake buyers make is not telling their mortgage broker when something significant changes, either because they don't want to worry anyone or because they assume it doesn't matter.

It almost always matters. And the earlier your broker knows, the more options there are to work with.

Your mortgage broker is on your side. Their job is to get your loan closed. But they can only help you navigate a problem if they know about it. Keep the communication open from pre-approval all the way through closing.

The Short Version

Between pre-approval and closing:

• No new credit accounts
• No large purchases on existing credit
• No job changes without telling your broker first
• No moving money around without a clear paper trail
• No cash deposits you can't document
• No late payments on anything
• No co-signing for anyone
• No financial surprises you haven't shared with your broker

The window between pre-approval and closing is typically 30 to 45 days. Keep your financial life stable for that period and you'll be fine.

Chris Casiello is a licensed mortgage broker and loan officer at The Casiello Team | Powered by Five Star Mortgage, based in Henderson, NV. He specializes in purchase loans, first-time homebuyers, VA lending, and creative loan problem-solving in the Las Vegas metro area.