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  • Writer's pictureDebi Haning

Things to Avoid When Applying for a Home Loan

Embarking on the journey to buy a new home is undeniably thrilling, with visions of settling into your dream space dancing in your mind. However, it's essential to exercise caution and consider key factors after applying for your mortgage but before reaching the closing stage. To ensure a seamless home-buying experience, here's a comprehensive guide on what to keep in mind when applying for your home loan.

Mind Your Cash Deposits:

Before making any deposits, especially in cash, it's crucial to understand that lenders require traceable sources for your money. To avoid complications, discuss the proper documentation process with your loan officer before making any financial moves.

Refrain from Significant Purchases:

It's not just home-related expenses that can impact your loan eligibility. Large purchases of any kind can raise red flags for lenders, affecting your debt-to-income ratios. To secure your mortgage approval, resist the urge to make substantial purchases, whether for cars, furniture or other items.

Avoid Cosigning Loans:

While helping others by cosigning a loan may seem noble, it can have repercussions on your debt-to-income ratios. Lenders will hold you accountable for the success and repayment of the loan, potentially jeopardizing your own mortgage approval.

Maintain Consistency in Bank Accounts:

Lenders find it easier to track and verify your assets when there's consistency among your accounts. Before transferring any funds, consult your loan officer to ensure a smooth process and minimize any potential hiccups.

Refrain from Applying for New Credit:

Whether it's a credit card or a car loan, applying for new credit can impact your FICO® score. Lower credit scores may affect your interest rate and eligibility for mortgage approval. Prioritize stability and avoid applying for new credit during the home-buying process.

Keep Accounts Open:

Contrary to popular belief, closing accounts does not necessarily reduce risk. The length and depth of your credit history, along with your credit utilization, play significant roles in your credit score. Closing accounts can have a negative impact on these aspects, potentially affecting your mortgage approval.

Communicate Changes with Your Lender:

Open communication with your lender is key. Inform them promptly about any changes in your income, assets, or credit status. Whether it's a shift in employment or unexpected financial adjustments, discussing these changes ensures that your home loan approval remains on track.


In your quest for a smooth and successful home purchase, consulting your lender is paramount. Before making significant financial decisions, such as large purchases or account movements, ensure you discuss these plans with your qualified loan officer. By following these guidelines, you can navigate the home loan process with confidence, paving the way for a seamless transition into your new home.  

If you're contemplating a change in your living situation and require the guidance of a reliable lender, feel free to get in touch with me. I'd be delighted to connect you with a trusted professional who can assist you in your home financing needs.


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