Navigating the final stages of securing a mortgage can be both exciting and nerve-wracking. Even after receiving a mortgage approval, certain missteps can jeopardize the closing process. To ensure a smooth transition to homeownership, here are ten critical actions to avoid between your mortgage approval and the actual closing.

1. Avoid Changing or Quitting Your Job

Lenders prioritize stability. Switching jobs or altering your employment status—such as moving from full-time to part-time—can raise red flags. Even if the new position offers a higher salary, probationary periods or changes in income consistency can lead lenders to reassess or even revoke your mortgage approval.

2. Don’t Reduce Your Income

Any decrease in income can affect your debt-to-income ratio, a key metric lenders use to assess your ability to repay the loan. Maintaining consistent income ensures that your financial profile remains favorable in the eyes of the lender.

3. Refrain from Applying for New Credit

Opening new credit accounts or taking on additional debt can negatively impact your credit score and debt-to-income ratio. These changes can make you appear riskier to lenders, potentially leading to higher interest rates or loan denial.

4. Don’t Close Existing Credit Accounts

While it might seem prudent to close unused credit cards, doing so can reduce your available credit and increase your credit utilization ratio. This shift can lower your credit score, affecting your mortgage terms.

5. Avoid Co-Signing Loans

Co-signing a loan makes you legally responsible for the debt. This obligation increases your liabilities, which can alter your financial profile and potentially disqualify you from your mortgage.

6. Continue Paying All Bills Promptly

Timely bill payments are crucial. Late payments can significantly impact your credit score, which lenders monitor up until the closing date. A drop in your score can lead to unfavorable loan terms or denial.

7. Don’t Use Funds Allocated for Closing Costs

Lenders expect you to have sufficient funds to cover closing costs, typically around 1.5% of the purchase price. Using these funds for other expenses can jeopardize your ability to close the deal.

8. Avoid Making Large Purchases

Purchasing big-ticket items like furniture or appliances on credit can increase your debt load and affect your credit score. It’s advisable to postpone significant purchases until after the mortgage has closed.

9. Don’t Alter the Purchase Agreement Without Consulting Your Lender

Any changes to the purchase contract, such as price adjustments or added contingencies, can affect your mortgage approval. Always discuss potential modifications with your lender before making them official.

10. Avoid Listing Your Current Property for Sale

If your mortgage approval is contingent upon retaining your current residence, listing it for sale can complicate or nullify your loan agreement. Ensure that any decisions regarding your existing property are communicated and approved by your lender.

Final Thoughts

The period between mortgage approval and closing is critical. Maintaining financial and employment stability during this time is essential to ensure a successful home purchase. Always consult with your mortgage advisor before making significant financial decisions to avoid jeopardizing your loan approval.

If you have further questions or need personalized advice, feel free to ask!

Choosing to become a First Time Home Buyer is one of the biggest financial decisions you’ll ever make. In Canada’s competitive housing market, it’s completely normal to feel overwhelmed, uncertain, or even afraid of taking that first step.

“What if I can’t afford it?”

“What if interest rates rise?”

“What if I don’t qualify for a mortgage?”

These are just a few of the fears I hear from first-time homebuyers. But here’s the truth: fear often comes from the unknown. The best way to overcome that fear is by educating yourself and getting expert guidance-starting with understanding what you can actually afford.

As a mortgage broker, I’m here to help you navigate this process with confidence. Let’s break down the biggest fears of first-time homebuyers, how to overcome them, and why sitting down with me is your best move toward home ownership.

Biggest Fears of First-Time Homebuyers (And How to Overcome Them)

1. Fear of Not Being Able to Afford a Home

Many first-time buyers assume homeownership is out of reach, but in reality, they may be more qualified than they think.

Overcome it by:

• Getting pre-approved for a mortgage so you know what your budget is BEFORE you go home hunting.

• Working with a mortgage broker to explore all available financing options

• Understanding new Government Measures enacted as of December 15, 2024 and how these changes can help lower your payment while also increasing your home buying power

• Taking advantage of first-time homebuyer incentives such as the First-Time Home Buyer Incentive, RRSP Home Buyers’ Plan, and land transfer and other tax rebates

When you know your actual home-buying power, you’ll stop guessing and start shopping with confidence.

2. High Mortgage Payments and Rising Interest Rates-The Unknown

Interest rates fluctuate, and the thought of high payments can be intimidating. But locking in the right mortgage product can protect you from unexpected financial strain

Overcome it by:

• Exploring fixed vs. variable rate mortgages based on your financial comfort level

• Learning about rate holds and how a mortgage broker can secure you a low rate

• Budgeting beyond the mortgage payment by factoring in property taxes, maintenance, and utilities

As your mortgage broker, I’ll shop around for the best rates and terms to ensure you’re comfortable with your payments

3. Rejection (What If I Don’t Qualify?)

Lenders have strict qualification criteria, and many first-time buyers fear they won’t meet them. But the reality is, with the right strategy, you can improve your mortgage approval odds.

Overcome it by:

• Understanding what lenders look for: credit score, income, employment stability, and debt levels

• Working with a broker who can match you with lenders that suit your unique financial situation

• Exploring Eco-Friendly incentives thru programs such as CMHC’s Eco Plus offer of a 25% partial premium refund for homes meeting specific energy efficient criteria

• Learning about alternative lending solutions if traditional banks aren’t an option

Mortgage approval isn’t a mystery—it’s a process. I can guide you through it and help you strengthen your application

4. Fear of Making a Bad Investment

Nobody wants to overpay for a home or buy a property that won’t appreciate in value.

Overcome it by:

• Understanding Eligibility Criteria with the recent increase in the insured mortgage cap and extended amortization options which will make it easier to qualify for a mortgage with a smaller down payment

• Getting a mortgage pre-approval so you can shop within your means.

• Working with a knowledgeable real estate agent to find a home in a strong market.

• Considering future growth, resale value, and neighborhood trends.

When you have a clear understanding of what you can afford and what makes a smart investment, you’ll feel empowered to make the right choice.

AND This is Why You Need a Mortgage Broker to Guide You

A mortgage broker isn’t just someone who gets you a mortgage. I’m here to simplify the process, educate you on your options, and help you secure the best financing solution for your first home.

Here’s what I bring to the table:

✔ Access to Multiple Lenders – I shop the market to find the best mortgage rates and terms tailored to your needs

✔ Continued Expert Guidance – I break down the home-buying process, so you fully understand your mortgage options now AND thru out the life of your mortgage

✔ Personalized Strategies – Whether you have great credit or are working on improving it, I help you qualify for the right mortgage

✔ Negotiation Power – I work for you, not the banks, ensuring you get the best deal possible

✔ A Stress-Free Experience – Buying a home should be exciting, not overwhelming. I handle the details so you can focus on finding the perfect home

Take the First Step: Let’s Talk About Your Home Buying Power

The first step to home ownership is knowing exactly where you stand. By sitting down with me for a free consultation, you’ll gain a clear understanding of:

✅ How much you can afford

✅ What mortgage options work best for you

✅ How to secure the best possible rate

✅ How to confidently move forward in your home-buying journey

Homeownership is within reach—you just need the right guidance to get there. Let’s turn your dream into a reality. Book your free consultation with me today right on my website!