What NOT to Do When You're Under Contract on a Home

by Lauren Pace Herrick

🚫 What NOT to Do When You’re Under Contract on a Home

You’ve found the perfect home, submitted your offer, and it’s been accepted—congrats! 🎉 But before you start picking out paint colors and planning your housewarming party, there are some crucial financial “don’ts” to keep in mind.

When you’re under contract, your lender will continue verifying your financial stability until the day you close. Making certain financial moves during this time could jeopardize your loan approval—even if you’re already pre-approved.

Here’s a quick guide to what NOT to do when you’re under contract:

🚫 1. Don’t Buy a Car (or Any Big-Ticket Item)

We get it—a shiny new car or a fancy appliance might feel like the perfect housewarming gift to yourself. But hold off on big purchases until after closing.

Large expenses increase your debt-to-income ratio (DTI), which could cause your lender to reconsider your loan approval.
Even if you plan to pay in cash, large withdrawals could raise red flags.

💳 2. Don’t Apply for New Credit

It might be tempting to open a new credit card to finance furniture or decor, but resist the urge.

Each new application triggers a hard inquiry on your credit report, which can lower your score.
A drop in your credit score—even a small one—can impact your interest rate or, worse, disqualify you from your loan altogether.

💰 3. Don’t Move Large Sums of Money Without Documentation

Transferring or depositing large amounts of money might seem harmless, but it can create complications for your lender.

Lenders review your bank statements carefully. Unexplained transfers or large deposits may require additional verification, which could delay closing.
If you need to move funds, consult with your lender first and be prepared to provide documentation.

🛍️ 4. Don’t Rack Up Debt on Your Existing Credit Cards

You might be excited to furnish your new home, but now is not the time for major credit card spending sprees.

Increased balances can raise your credit utilization ratio, which can hurt your credit score.
Even if you’re approved for the home, higher debt can affect your loan terms or conditions.

💼 5. Don’t Change Jobs Without Talking to Your Lender

Considering a career switch? Unless it’s absolutely necessary, hold off until after closing.

Lenders verify your employment status and income multiple times before closing.
A new job—especially one with a probation period, variable income, or commission-based pay—could complicate your loan approval.

✅ The Bottom Line: Keep Your Finances Steady

When you’re under contract, think of your finances as being under a microscope. Even small changes could affect your ability to close smoothly and on time.

💡 Pro Tip: When in doubt, check with your lender before making any financial moves. It’s better to be safe than sorry!

🏡 Thinking About Buying in the Hattiesburg or surrounding areas? Let’s Talk!

If you’re ready to buy a home or have questions about the process, I’m here to help. Let’s make sure your journey to homeownership is smooth and successful—without any financial missteps along the way.

📲 Lauren Pace Herrick, REALTOR, Broker Associate

Selling Southern 601-602-4370 Office