Number 1 Rule After Pre-Approval

You’ve done it! You’ve gone through the pre-approval process, and your lender has given you the green light to start house hunting. But before you celebrate with a shopping spree—STOP! There’s one crucial rule you must follow: Do not make any large purchases until after you close on your home.

Why Does This Rule Matter?

When a lender pre-approves you for a mortgage, they evaluate your financial situation based on your income, credit score, debt-to-income ratio, and available funds. Your pre-approval is essentially a snapshot of your financial health at that moment.

But here’s the catch: that snapshot isn’t permanent. Lenders continue monitoring your financial situation right up until closing. If you make a big purchase, like buying a new car, new furniture, or even financing appliances, it could throw off the calculations that got you pre-approved in the first place.

How a Large Purchase Can Unravel Your Loan

Increases Your Debt-to-Income Ratio (DTI): The more debt you take on, the higher your DTI, which could make you ineligible for the loan amount you were pre-approved for.

Lowers Your Credit Score: Large credit purchases can impact your credit utilization and score, making lenders view you as a riskier borrower.

Reduces Your Available Cash Reserves: If you drain your savings for a big purchase, you may no longer have enough funds for your down payment or closing costs.

Triggers a New Credit Inquiry: If you finance something big, lenders will see a new credit inquiry, which could delay underwriting or even lead to a loan denial.

What Should You Do Instead?

Stick to Your Budget: Keep your finances steady and avoid unnecessary spending.

Wait Until After Closing: Once the keys are in your hand, then you can think about new furniture or that dream car.

Talk to Betty First: If you’re considering a financial move, always check with your mortgage professional before making any big purchases.

Home Loan Betty wants to ensure your homebuying journey is smooth and stress-free. Staying financially steady after pre-approval is one of the simplest ways to avoid unnecessary hurdles before closing. If you have questions about what you can and can’t do after pre-approval, we’re here to help!

Buying a home is exciting—don’t let a big purchase derail your dreams!