What not to do before applying—or closing.

1. Do not apply for unrelated credit

A new credit card, personal loan, furniture promotion, buy-now-pay-later plan, or credit-limit request can create an inquiry, a new account, or a new payment. That can affect the credit score or require the lender to recalculate debt-to-income ratio.

Mortgage shopping itself is different. The CFPB explains that multiple mortgage credit checks within a concentrated shopping window are generally treated as one inquiry for scoring purposes. The goal is not to avoid comparing mortgage lenders; it is to avoid unrelated borrowing while doing so.

2. Do not finance or lease a vehicle

A car payment can consume substantial monthly qualifying capacity. A $700 payment is not merely $700 less in the bank—it becomes recurring debt in the DTI calculation. Even when the credit score remains adequate, the new payment may reduce the mortgage amount or push the ratio outside program limits.

Do not assume paying cash is harmless either. A large cash purchase can reduce down-payment funds, closing costs, and reserves. Ask the lender to model the effect before buying.

3. Do not run up credit-card balances

Large purchases can increase minimum payments and utilization, both of which may weaken the application. Buying furniture and appliances before ownership is especially risky: the transaction can still be delayed or fail, and the resulting debt may be discovered during a pre-closing review.

Continue ordinary spending responsibly, but postpone discretionary purchases that materially change balances until the loan has funded and the closing is complete.

4. Do not co-sign for someone else

Co-signing makes you legally responsible for the debt. The payment can count against your DTI even if the other person intends to pay it. Some guidelines permit exclusion after a documented history of payments by the other party, but that is not an instant solution for newly co-signed debt.

5. Do not miss payments—or close accounts impulsively

Late payments can damage credit at exactly the wrong time. Keep every account current, including obligations that may not appear on the first credit report. Also avoid closing long-standing revolving accounts simply to “clean up” unless the lender recommends it; closing can change available credit and utilization.

Do not dispute accurate credit information during underwriting without discussing it with the lender. An active dispute can complicate automated or manual review.

6. Do not change jobs, compensation, or work status without a review

A promotion in the same field may be manageable; changing from salary to commission, W-2 employment to self-employment, full-time to part-time, or quitting can fundamentally alter qualifying income. A gap, probationary status, variable hours, or a new business may require a different history and documentation.

Life does not stop for a mortgage. If a change is necessary, tell the lender before acting when possible and immediately afterward when it is not.

7. Do not move large amounts of money without preserving the trail

Consolidating accounts may seem helpful, but every transfer can create another statement request. Large deposits may need to be sourced. Keep statements, transfer confirmations, sale documents, gift records, and both sides of account-to-account movements.

Never deposit someone else’s money temporarily to make the account look stronger, and never disguise borrowed money as a gift. Read the guide to seasoned money and proof of funds before moving purchase funds.

8. Do not spend the cash reserved for closing

The lender may have calculated approval using a specific down payment, closing-cost estimate, prepaid taxes and insurance, earnest-money credit, and post-closing reserves. Appraisal issues, rate changes, insurance, property taxes, or seller-credit limits can change the final figure. Preserve a buffer rather than treating the earliest estimate as a ceiling.

Track the projected payment and cash needed with the mortgage calculator, then rely on the lender and closing disclosure for transaction-specific numbers.

9. Self-employed buyers: do not confuse tax savings with mortgage income

For a sole proprietor, Schedule C reports business income minus business expenses. Legitimate deductions can reduce taxable net profit—and the lender generally analyzes tax returns and business cash flow to determine income that is stable and available for the mortgage. Some noncash or nonrecurring items may receive permitted adjustments, but not every deduction is added back.

This does not mean a buyer should omit valid expenses, inflate income, amend returns solely to manipulate approval, or ignore tax law. Accurate filing comes first. It means that a self-employed person planning to buy should coordinate early with a qualified tax professional and an experienced mortgage professional, so the person understands how lawful tax choices and business trends may affect qualifying income before filing deadlines or purchase contracts.

10. Do not hide debts, support obligations, or side arrangements

Fannie Mae guidance requires lenders to consider liabilities affecting the borrower’s ability to repay. If additional liabilities are disclosed or discovered through closing, the lender may have to recalculate DTI. Omitting a debt does not make it disappear; it creates a credibility and underwriting problem later.

Disclose student loans, leases, co-signed obligations, real-estate debt, alimony or child support when applicable, personal loans, and any new obligation. Let the lender decide how a guideline treats it.

11. Do not make property or occupancy representations casually

Primary residence, second home, and investment property loans have different pricing and requirements. Be truthful about intended occupancy and do not sign a lease, transfer title interests, or make side agreements that conflict with the application or purchase contract.

12. Do not wait until the last minute on insurance

Insurance availability and cost can affect both eligibility and the monthly payment. Start quotes early, particularly when wildfire, flood, roof condition, prior claims, or property type may complicate coverage. Do not cancel existing required coverage before confirming the new policy and closing instructions.