7 Mistakes That Can Kill Your Mortgage Approval

Updated October 2026 · By Jet Ameti, NMLS #757627

Every year, buyers with solid pre-approvals lose their loans in the final weeks — not because they couldn’t afford the house, but because they did something normal that the mortgage process treats as radioactive. None of these mistakes are complicated. All of them are avoidable. Memorize this list from application day to closing day.

1. Opening new credit (or even applying for it)

The furniture store’s “no payments for 12 months!” offer. A new rewards card. A car loan because the old one died. New credit means new inquiries (which can ding your score), new monthly payments (which raise your DTI), and a changed credit profile the underwriter must re-evaluate. Even applying can trigger questions. Buy the couch after you have the keys.

2. Changing jobs — or how you’re paid

Quitting, getting laid off, switching from salary to commission, going from W-2 to 1099, even a “lateral” move to a new employer — any of these can force the lender to recalculate or re-document your income, and some changes disqualify your income entirely until a history is re-established. A raise at the same employer? Usually fine. Anything structural? Call your loan officer before you accept, not after.

3. Large undocumented deposits

Underwriters must source large or unusual deposits — every dollar going toward your down payment needs a documented origin. Mystery cash deposits, transfers from friends, crypto liquidations without records, or a sudden pile of Venmo payments will stall your file while everyone scrambles for a paper trail that may not exist. Keep money where it is, and if funds must move, document the source first and move it by traceable transfer.

4. Co-signing a loan for someone else

Co-signing your kid’s car or a relative’s loan makes that debt yours in the underwriter’s eyes — the full monthly payment counts against your DTI whether or not you’re the one paying it. Generosity is admirable; timing it during your mortgage process can cost you the house. Wait until after closing.

5. Closing old credit accounts

“Cleaning up” your finances by closing old cards feels responsible — and it can lower your credit score right when you need it most, by shrinking your available credit (raising utilization) and eventually shortening your credit history. Leave every account exactly as it is until after closing. (Full explanation: the 90-day credit plan.)

6. Moving money between accounts

Consolidating accounts, shifting the down payment from savings to checking to a money market — every move creates a new statement trail the underwriter has to reconcile, and each transfer looks like a new deposit to source. If you must move funds, do it once, early, with complete statements from both sides showing the transfer. Better: park the money and don’t touch it.

7. Misrepresenting anything on your application

Inflating income, hiding debts, “forgetting” a property you own, misstating occupancy (it’s not your primary residence if it isn’t) — this isn’t just a declined loan, it’s mortgage fraud, a federal crime. Lenders verify income with the IRS, employment directly, and deposits line by line; the things people think they can hide are exactly the things that get found. Tell the truth, document everything, and if your real numbers don’t work, let your loan officer find a structure that does. There’s always an honest path — there is never a safe dishonest one.

Already made one of these mistakes?

Don’t panic — and definitely don’t try to hide it. Most of these are fixable if we catch them early: a new account can be documented and re-underwritten, a deposit can be sourced with the right paper trail, a job change can be evaluated against program rules. What turns a hiccup into a dead deal is surprise — the underwriter discovering it days before closing with no time to cure it. Call your loan officer the moment something changes. The fix is almost always cheaper and faster than the cover-up.

The one rule that covers all seven

From the day you apply until the day you close: no new debt, no job changes, no big money moves, no credit changes — without asking your loan officer first. A two-minute phone call before you act beats a two-week crisis after. My clients have my number for exactly this reason — I’d far rather talk you out of a furniture-store credit card than try to save your closing afterward.

Already pre-approved and wondering if something you did matters? Tell me what happened — the sooner I know, the more options we have.