Many home-owners and new home-buyers make the mistake of applying for new credit, depleting their cash reserves or rushing out to buy things to furnish their new home as soon as the seller accepts their purchase offer or the lender pre-approves their loan. But, there are still a few major hurdles to overcome before the keys are handed out. Here are some things to avoid during the loan process to assure your transaction goes as smoothly as possible:

Don’t make an expensive purchase or apply for new credit!. It may be tempting to order that new sofa for your soon-to-be living room and try to avoid making major purchases like furniture, cars, appliances, electronic equipment, jewellery, or vacations until after the closing. Purchasing with a store credit card or even one of your own credit cards could jeopardize your credit worthiness during the time it means the most. Using cash to purchase big items can also create a problem because many banks take into consideration your cash reserve when approving your mortgage.

Many homeowners make the mistake of applying for new credit, depleting their cash reserves or rushing out to buy things as soon as the lender pre-approves their loan. But there are still a few major hurdles to overcome before their loan can close. Here are some things to avoid during the loan process to assure your transaction goes as smoothly as possible:

Don’t make an expensive purchase or apply for new credit! It may be tempting to order that new sofa for your living room and try to avoid making major purchases like furniture, cars, appliances, electronic equipment, jewellery, or vacations until after the closing. Financing that furniture with a store credit card or even one of your own credit cards could jeopardize your credit worthiness (score) during the time it means the most. Using cash to purchase big items can also create a problem because many lenders take into consideration your cash reserve when approving your mortgage.

Don’t get a new job. Lenders like to see a consistent job history. Generally, changing jobs will not affect your ability to qualify for a mortgage loan – especially if you are going to be making more money. But for some people, getting a new job during the loan approval process could raise some concern and affect your application progress.

Don’t switch banks or move money around. As we review your loan package, you will likely be asked to provide bank statements for the last two or three months on your checking accounts, savings accounts, money market funds and other liquid assets. To eliminate potential fraud, most loans require a thorough paper trail to document the source of all funds. Changing banks or transferring money to another account – even if its just to consolidate funds – could make it difficult for the lender to document your funds.

Don’t disregard the refinance loan requirements. In order to process your loan, you need to meet certain requirements, just like you did on your purchase loan. The lender may need copies of your bank statements, W2’s and other paperwork. The lack of current financial information, if your loan requires it, could cause you to delay your loan and the financing you need.