Week 10, Day 66
Don't let these common mistakes derail your Nevada home purchase. Learn what to avoid during the mortgage process to ensure smooth closing.
Switching jobs, becoming self-employed, or taking unpaid leave between pre-approval and closing can kill your mortgage approval—even days before closing.
Why It's Dangerous:
✓ What to Do Instead:
Wait until after closing to change jobs. If unavoidable, get a written offer letter showing same/higher income in the same field with no gaps.
Buying furniture, financing a car, opening new credit cards, or co-signing loans changes your debt-to-income ratio and can disqualify you.
Why It's Dangerous:
✓ What to Do Instead:
Wait 60 days after closing before financing anything. Use savings for immediate needs like moving expenses. Buy furniture after you own the home.
Depositing gifts, cash, or unexplained funds into your bank accounts raises red flags. Lenders must verify the source of all deposits over $500-1,000.
Why It's Dangerous:
✓ What to Do Instead:
Use funds already "seasoned" in your account for 60+ days. If you receive a gift, get a signed gift letter immediately and keep the donor's bank statement showing the transfer.
In Nevada's competitive markets like Las Vegas and Reno, sellers won't take you seriously without pre-approval. You'll also waste time looking at homes you can't afford.
Why It's Dangerous:
✓ What to Do Instead:
Get fully underwritten pre-approval before viewing homes. This verifies income, assets, credit, and employment—giving you a real budget and making offers competitive.
Your loan officer will give you specific instructions during the process. Ignoring advice about documentation, timing, or financial moves can delay or kill your loan.
Why It's Dangerous:
✓ What to Do Instead:
Respond to all requests within 24 hours. Ask before making ANY financial moves. Keep your loan officer updated on job changes, large purchases, or account changes immediately.
Situation: Buyer accepted a new job with 20% pay raise 2 weeks before closing on a $425,000 Henderson home.
Result: Lender required 30 days of pay stubs from new job. Closing delayed 6 weeks. Seller kept $15,000 earnest money and sold to backup offer. Buyer lost the home.
Lesson Learned:
Never change jobs during the mortgage process—even for better pay—without consulting your loan officer first.
Situation: Buyer financed $8,000 in furniture 10 days before closing, adding $180/month to debt load.
Result: DTI jumped from 42% to 45.5%, exceeding conventional loan limit. Loan denied 3 days before closing. Lost home and earnest money.
Lesson Learned:
Wait until after closing to buy furniture, appliances, or finance anything. Even small monthly payments can push you over DTI limits.
Situation: Parents gave buyer $25,000 cash for down payment, deposited 2 weeks before closing. No gift letter or donor documentation.
Result: Underwriter couldn't verify source—assumed it was borrowed debt. Required full documentation. Closing delayed 3 weeks while parents provided bank statements and gift letter.
Lesson Learned:
Gift funds require immediate documentation: signed gift letter stating no repayment expected, plus donor's bank statement showing they had the funds.
Situation: Got pre-approved before house hunting. Maintained employment. Avoided credit inquiries. Responded to document requests within 24 hours.
Result: Smooth 28-day closing with no delays. Rate lock saved $140/month vs. if they'd waited 3 more weeks. Closed under budget with $2,500 seller concession.
Lesson Learned:
Following your loan officer's guidance and avoiding common mistakes leads to smooth closings and better terms.
Work with experienced Nevada loan officers who will guide you through every step and help you avoid costly mistakes.
No. Financing a car (or anything) after pre-approval changes your debt-to-income ratio and will show up when the lender pulls credit again before closing. This can disqualify you or delay closing while the new debt is evaluated. Even paying cash for a car depletes your reserves, which lenders verify. Wait until after closing—usually 30-60 days—before making any large purchases.
At least 3 times: (1) During initial pre-approval, (2) When you go under contract, and (3) Within 24-48 hours before closing. Some lenders verify on closing day itself. If you change jobs at any point, the lender will require new documentation—30 days of pay stubs from the new employer, an offer letter, and proof you're in the same line of work. Switching from W-2 to self-employed during the process almost always kills the loan.
Gift funds are allowed, but they MUST be documented properly: (1) You need a signed gift letter from the donor stating the amount, that it's a gift with no expectation of repayment, and their relationship to you. (2) The lender needs a bank statement from the donor showing they had the funds. (3) You need proof of the transfer (wire confirmation, deposit receipt). Without this paper trail, the lender assumes it's a loan you have to repay, which counts against your DTI. Get the gift letter signed BEFORE depositing the money.
No. Reducing your hours reduces your qualifying income. If you were approved based on full-time salary and then go part-time, your income will no longer support the loan amount. The lender will catch this during final employment verification and will either deny the loan or require you to requalify at the new (lower) income level, which may mean a smaller loan or higher down payment. Never make any employment changes without asking your loan officer first.
No. Even one new credit card can hurt you in multiple ways: (1) The hard inquiry lowers your credit score, (2) It adds a new monthly payment to your DTI calculation (lenders assume you'll use the card and estimate a payment), (3) It reduces your average account age, further lowering your score. All of this shows up when the lender pulls your credit again before closing. Use existing credit cards or savings for moving expenses, and apply for new credit 60+ days after closing.
Most lenders flag deposits over $500-$1,000 that don't match your normal income pattern. This includes: cash deposits, checks from non-employers, Venmo/Zelle/PayPal transfers, wire transfers, and any unusual large deposits. You'll need to provide a letter of explanation and often documentation (gift letter for gifts, sale receipt if you sold something, etc.). Funds that have been in your account for 60+ days are "seasoned" and don't need explanation. Keep your accounts stable during the mortgage process.
Missing document deadlines can: (1) Push back your closing date (potentially past your rate lock, requiring a rate extension fee or losing your locked rate), (2) Give the seller grounds to cancel the contract and keep your earnest money, (3) Delay underwriter approval, allowing other issues to pop up, (4) Signal to the lender that you're a risky borrower. Respond to ALL document requests within 24 hours. Upload everything your LO asks for immediately—even if it seems excessive. Fast documentation = smooth closing.
Our Nevada loan officers will guide you through the entire process and make sure you avoid costly mistakes.
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