What Not to Do While Your Loan is Being Processed


For most prospective home buyers, getting approved for a loan is one of the key components of the home purchase process. However, getting pre-approved doesn’t mean you’re done! You still need conditional and final approval of your loan to fund and close. To ensure everything goes smoothly, here’s what not to do while your loan is being processed.

Don’t Be Slow in Responding to Requests from Your Lender

Help us help you! At the Potempa Team, we’re dedicated to our clients and want to help you move through the purchase process as quickly as possible. That said, your responsiveness has a significant impact on the speed of your mortgage approval. Be sure to provide any requested documents and information quickly.

Don’t Open or Close Credit Cards or Pay Off Significant Debt

If you’re looking to purchase a home, avoid opening or closing credit lines, paying off significant debts, or co-signing loans during the mortgage process. Any alterations to your credit, including opening new lines or closing existing ones, can negatively impact your approval chances. Maintaining stable credit during and after the pre-qualification stage is critically important. Try to keep your credit card balances below 30% of your available limit. Avoid paying off old collections or existing debt unless explicitly requested by your loan processor.

Don’t Make Major Purchases

Similarly, avoid making major purchases. Cars, boats, and new furniture for your home are things to avoid until after you’ve funded, closed, and have the keys to your property in hand. These large purchases can either increase your debt-to-income ratio, potentially disqualifying you, or cut into the cash you need to have on hand to cover closing costs and more. During the loan approval stage, your entire financial picture is analyzed. Don’t raise any unintended red flags!

Don’t Quit or Change Jobs If You Can Help It

Sometimes, you really can’t help this one. However, if it’s in your power to stay with your current employer or contract until after your mortgage is secure, always take that option. Most escrow periods are short (only 30-45 days). Making a change to your employment could result in your loan application being denied or significantly slowing things down as new documents need to be requested.

Don’t Make Any Large Cash Deposits

Most people don’t generally think about this last point as being a problem. You have a friend or family member who offers to gift you some cash to put toward your new home. Seems like an easy yes, right? However, any unexplained large deposits may raise concerns and slow down or jeopardize the loan process. If you know you may be gifted money, discuss it with your loan officer from the outset to ensure proper documentation. Lenders verify the source of funds to ensure they are not from unapproved sources or additional loans, maintaining a clear record of incoming and outgoing funds, especially for earnest money deposits and down payments. Separate personal and business funds if you’re self-employed. Refrain from unaccounted large cash deposits or electronic transfers into your personal account. Payroll deposits and standard transfers are generally acceptable.


The Potempa Team is here to support and guide you every step of the way! If you have questions about loans, what not to do while your loan is being processed, or are ready to start your pre-approval, please click here to contact us.

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