Buying a home is an exciting process, but it requires careful planning and a strong creditworthiness. From your initial application to closing day, it can feel like you’re under a microscope. And in many ways, you are—mortgage lenders closely scrutinize your finances and credit history to ensure you can truly afford your home loan.
The good news? With a few smart moves, you can help ensure a smooth, stress-free mortgage process from start to finish. Keep reading to find the essential do’s and don’ts that can help you reach closing day with confidence.
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Do Get Pre-Approved Before You Start House Hunting
When you decide that you’re finally ready to buy a new home, you may start scouring Zillow and stopping by open houses in your favorite neighborhoods. While this is often the most exciting part of the home-buying process, it’s not the first step.
Before you start touring homes, it’s important to get pre-approved for a mortgage with your preferred lender. A pre-approval lets you know what type of home you can afford and strengthens your offer in the eyes of sellers. It shows that you’re serious and qualified.
Note: Pre-approval and pre-qualification are not the same. Pre-qualification offers a quick estimate of the loan amount you might qualify for, based on some basic financial information you provide. Pre-approval, on the other hand, requires a more thorough review of your income, assets, and credit. More importantly, it shows sellers and lenders that you’ve been conditionally approved for a mortgage, pending final approval.
Don’t Open or Close Any Credit Accounts
Once you’re pre-approved for a mortgage, you want to keep your credit stable until you officially close on your loan. Otherwise, you may put your eligibility at risk and only realize it once it’s too late.
One way to protect your credit is by avoiding opening or closing credit accounts:
- Opening new accounts can result in hard inquiries, which can ding your credit score by a few points.
- Closing old accounts can reduce your available credit and spike your credit utilization ratio, lowering your credit score.
Do Pay Your Bills on Time
Along with new credit inquiries and credit utilization, your payment history is a crucial credit scoring factor. It makes up 35% of your credit score. Since it’s so influential, just one missed payment can reduce your credit score enough to impact your loan approval.
To keep this factor in tip-top shape, continue paying all of your bills on time throughout the mortgage lending process. If you struggle to keep up with your payment deadlines, take advantage of your creditors’ auto-pay options.
Read More: How Much Does a Collection Impact Your Credit Score?
Don’t Co-Sign Loans for Anyone
When you co-sign a loan for a loved one, their new account’s credit data gets listed on your credit reports. Thus, their missed payments can hurt your credit score. Their loan can also increase your total debt, boosting your debt-to-income (DTI) ratio.
While it can be hard to say no to loved ones, avoiding co-signing loans leading up to your upcoming home purchase can preserve your credit and keep your DTI within an acceptable range.
Read More: Understanding Debt-to-Income Ratios’ Impact on Mortgage Approval
Don’t Change Jobs or Income Structure
After getting approved for a home loan, you may assume that you’re in the clear. However, this isn’t the case—lenders will review the core components of your eligibility right before closing to ensure you still qualify.
Just as you want to maintain a high credit score, you also need to ensure the stability of your employment. A sudden job change or compensation renegotiation can complicate things. Moving from W2 to 1099 contract work can be especially risky, since lenders typically require two years of income history for self-employed borrowers.
Read More: How to Qualify Self-Employed Business Owners and Contract Workers
Do Save, Save, Save
Another reason to hold off on big purchases is to maintain healthy cash reserves. Along with your down payment, you’ll also need to set aside money for:
- Closing costs
- Home inspections
- Moving expenses
- Home repairs
A healthy savings balance can help you cover these costs comfortably and look more reliable to lenders.
Don’t Make Undocumented Deposits
While you want ample cash reserves, the source of your funds is equally important. Personal loans from friends or family, deposited cash from under your mattress, and other types of unsourced funds can create problems.
The reason? Undocumented funds raise concerns for lenders. It can signal potential issues with the legitimacy and stability of your finances. That’s why lenders require all deposits to be appropriately sourced, documented, and verified.
If a loved one wants to contribute to your home purchase, discuss their “gift funds” with your lender. They’ll explain how to properly document the gift to create an adequate paper trail.
Don’t Make Major Purchases
After submitting an offer on your dream home, your inner interior designer may spring to life, tempting you to purchase new furniture, invest in fancy appliances, or shop for a car that will better suit your new driveway.
Unfortunately, any large purchases you make on credit can increase your DTI. Thus, you’ll want to avoid making large purchases or opening new store credit cards to secure discounts with retailers.
Don’t Miss Any Deadlines
From document submissions to inspections and contingencies, missing a deadline can delay your closing process. In some cases, it could even cost you your dream home.
By setting reminders, staying on top of your to-do list, and keeping in close contact with your lender, agent, and title company, you can keep the process moving and avoid unnecessary setbacks.
Do Stay Organized
The mortgage process involves a lot of paperwork, so keeping an organized folder of all your documents can help you respond to requests faster and reduce stress. Here are some documents to keep readily available:
- Recent pay stubs
- Two years of W-2s and tax returns
- Two months of bank statements
- Retirement and investment account statements
- Driver’s license or another form of government ID
- Mortgage and insurance statements for any other properties you own
Don’t Be Afraid to Ask For Support from Your Lender
The mortgage process can feel overwhelming, even if you’ve been through it before. But the good news is—you don’t have to go it alone.
A reliable lender will stay in close contact throughout each step, offering guidance, answering your questions, and providing resources to help you feel confident along the way. They’ll also make sure you complete important tasks on time to keep things moving smoothly.
If anything feels unclear, don’t hesitate to reach out to your lender. With such a major financial decision, there’s no such thing as a “dumb question.”
Special Considerations Based on Your Situation
The Do’s and Don’t listed above apply to nearly all aspiring homebuyers. However, there may be additional considerations if you fall into the following subcategories:
- First-time buyers — If you’re embarking on your very first home purchase, make sure to ask your lender about first-time homebuyer programs in your area. Many of these programs enable you to offer lower down payments or secure financial assistance for your closing costs.
Read More: 9 Tips For First-Time-Homebuyers in Today’s Market
- Self-employed borrowers — In 2025, the gig economy is thriving, prompting many people to venture away from W2 work and start their own businesses. If you’re one of them, make sure to keep your business and personal finances separate and well-documented. Also, keep in mind that you’ll need at least two years of tax returns proving consistent income.
- Investors — Real estate investing can be a lucrative endeavor. However, lenders may require separate reserves for each additional property you own. You may also need to provide documentation such as rent rolls, lease agreements, and other paperwork if you plan to use projected rental income to help qualify for the loan.
Showcase Your Stability and Secure Your Dream Home With Certified Credit
Whether you’re a first-time homebuyer, a seasoned investor, or a self-employed entrepreneur, the same basic principles apply. By following these do’s and don’ts, you can set yourself up for a smooth mortgage process and a successful home-buying journey.
When in doubt, ask your lender before making any major financial decisions. Even small actions—like opening a new credit card or moving money between accounts—can have unintended consequences that may affect your loan approval.
Want even more mortgage lending education? Check out these articles from the Certified Credit blog:
- What’s a Good Credit Score for a Mortgage?
- How to Improve Your Credit Score
- How to Build Credit with No Credit History
- 10 Common Credit Score Myths
- What is Alternative Credit Data?
Are You a Mortgage Lender?
As a leading mortgage solutions provider, Certified Credit produces a wealth of educational content for aspiring homebuyers. Feel free to share our resources with your applicants to bring them up to speed!
And if you’re looking for ways to enhance your lending process, you can schedule a credit consultation with our team. We offer a wide range of products and services to help optimize your efficiency, reduce costs, and strengthen your borrower experience.
Sources:
FICO. What is Payment History?
https://www.myfico.com/credit-education/credit-scores/payment-history
Fannie Mae. Originating & Underwriting Selling Guide.
