What Should I Avoid Doing Between Pre-Approval and Closing?

A pre-approval is based on a snapshot of your finances. Your lender approves the loan on that picture, then confirms it again before the loan funds.

I'm Jeanette Nelson, a REALTOR® with Jeanette Nelson Real Estate, Keller Williams Realty, serving Orange County, Huntington Beach, Costa Mesa, Fountain Valley, and surrounding areas. The weeks in escrow are when I see first-time buyers get nervous, and the steadiest path to closing day is often the quietest one with your money.

This is general information, not lending advice. Your lender is the right person to answer questions about your specific loan.

Opening new credit. A new credit card, car loan or store financing adds a monthly payment. The Consumer Financial Protection Bureau (CFPB) explains that your debt-to-income ratio is all your monthly debt payments divided by your gross monthly income, and lenders use it to gauge whether you can handle the loan. A new payment changes that math.

Applying for credit at all. Fannie Mae's Selling Guide says a credit report must list all inquiries made in the previous 90 days, so new applications show up for your lender to see.

Buying furniture or appliances on credit. Many buyers want to furnish the new home right away. Wait until after closing, and ask your lender first even then.

Missing payments. Keep paying every bill on time, including the ones you think are small.

Your loan is approved based on your current income. Fannie Mae's Selling Guide says the lender must verify your employment no more than 10 business days before the note date, which is around closing. That means your lender may call your employer during the last days of escrow.

If you are thinking about changing jobs, going from salary to commission, or becoming self-employed, talk to your lender before you make the move. Sometimes a change is unavoidable. Telling your lender early gives them time to see what it means for your loan.

Large deposits. Fannie Mae defines a large deposit as a single deposit that exceeds 50% of your total monthly qualifying income. For a purchase, the lender must document where it came from if those funds are used for your down payment, closing costs or reserves.

Cash deposits. Cash is hard to trace. Ask your lender before you deposit it.

Gift funds. If family is helping, your lender will have specific paperwork. My article on when parents help with a first home explains the basics.

Moving accounts. Opening or closing bank accounts during escrow can mean more statements to explain. Keep your accounts where they are when you can.

1. Answer your lender fast. Quick replies to document requests keep your timeline on track. My article on mortgage documents lists what lenders often ask for.
2. Review your Closing Disclosure. The CFPB says your lender must send it at least three business days before closing. Compare it to your Loan Estimate and ask about anything that changed.
3. Know what triggers a new waiting period. The CFPB says a new three-day review comes with an APR increase above set limits, an added prepayment penalty, or a change in loan product.
4. Protect your wire. Confirm wiring instructions by phone with your escrow officer at a number you already know. My article on wire fraud explains why.

If you are pre-approved and getting ready to make offers, I'd love to walk through the escrow timeline with you, so you know what to expect each week. Call or text me at 714.366.8575 | DRE: 01397168, or contact me. Jeanette Nelson is a REALTOR® with Jeanette Nelson Real Estate, Keller Williams Realty, serving Orange County, Huntington Beach, Costa Mesa, Fountain Valley, and surrounding areas.