From the time an applicant walks through the door until closing, lenders are increasingly cautious about the mortgage process. Even applicants with good credit and a solid down payment can see loans delayed or denied by last-minute issues.
Tips to avoid last-minute problems
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Avoid major purchases and large cash withdrawals. An approval is not final until closing. Lenders view high-dollar purchases as additional debt and may withdraw an approved loan if you buy a car or make other large purchases before closing. Paying for such purchases with cash is also risky because lenders review cash reserves when finalizing the loan.
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Don't forget about last-minute credit checks. Lenders commonly pull credit again shortly before closing. That recheck can reveal recent delinquencies, new credit applications, or high balances that lower your score and jeopardize the loan.
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Postpone big career or job changes. Underwriting depends on employment stability and income. Changing jobs — especially switching industries or taking a job with probationary pay — can delay closing or require additional documentation to prove ongoing income.
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Expect unexpected costs. Closing costs and rate-related charges can change and sometimes add up to a few percent of the purchase price. Keep some reserves beyond your down payment to cover points, fees, and last-minute adjustments so you don't arrive at closing short of funds.
For more detail on how credit changes can affect a loan, see Understanding the Impact of Credit Scores on Mortgages.
For related information about how mortgages interact with other financial products, see Understanding Life Insurance and Mortgages.
A Consumer's Guide to Mortgage Settlement Costs, a publication by the Federal Reserve Board, is a useful resource to understand typical closing fees and procedures.
If you have questions or want to review your situation, talk to your agent.
Frequently Asked Questions
Will a recent credit-card charge derail my mortgage?
Small routine charges are unlikely to cause issues, but large new balances or missed payments discovered in a final credit pull can affect approval.
Can changing jobs delay or cancel a mortgage?
Yes. A job change can require additional documentation or cause a lender to pause funding until employment stability and income are verified.
How much should I set aside for closing costs?
Closing costs vary, but many buyers plan on roughly 2–3% of the purchase price; keep some additional reserve for unexpected adjustments.
Is it safe to withdraw cash from my bank before closing?
No. Large cash withdrawals can trigger lender concerns about source of funds and reduce documented reserves needed at closing.