THE CLOSING FREEZE: 10 THINGS NOT TO DO BEFORE YOU GET THE KEYS
Your offer is firm, the conditions are waived, and the hard part feels like it’s over. For many buyers, this stretch between a firm deal and closing day is when they finally relax.
It’s also when some of the most avoidable problems happen.
A buyer finances a new car, co-signs a loan for a family member, or moves their down payment into a different account to keep things organized. Then the lender re-pulls credit or re-checks bank statements before funding, and suddenly the mortgage is back under review.
WHY YOUR APPROVAL CAN STILL CHANGE
A mortgage approval is based on a snapshot of your finances at the time you applied: your credit, your income, your debts, and your savings. Lenders can verify that picture again at any point before they release funds.
If something has changed, the lender can adjust the terms, reduce the amount, or decline the mortgage, sometimes just days before closing. By then, you’re committed to the purchase. If you can’t close, your deposit is at risk and you could be in breach of the agreement.
The good news is this is easy to avoid. Here’s what to hold off on until you have the keys.
1. DON’T FINANCE ANYTHING
No car loan, no furniture financing, no “don’t pay for a year” deal. Every new monthly payment counts against your debt ratios, the numbers lenders use to decide how much mortgage you can carry. The new couch can wait until after closing.
2. DON’T OPEN OR CLOSE CREDIT CARDS
That store card for 15% off the new fridge means a credit check and new debt on your file, both of which can affect your score. Closing an old card can hurt too, because it reduces your available credit and can shorten your credit history.
3. DON’T RUN UP THE CARDS YOU ALREADY HAVE
Moving costs, paint, and appliances add up quickly. Putting them on credit raises your balances and your minimum payments, which changes your debt ratios. If you need to buy things for the new place, pay cash where you can, or wait until after closing.
4. DON’T CHANGE JOBS
This includes quitting, switching employers, or moving from salary to commission or self-employment. Even a better-paying job can create a problem, since many lenders want to see that you’re past any probation period. Self-employed income usually needs a two-year track record before lenders will use it. If a job change is coming, talk to your mortgage agent before you sign anything.
5. DON’T MOVE MONEY AROUND WITHOUT A PAPER TRAIL
Lenders want to see 90 days of history showing where your down payment came from. Large cash deposits, transfers between accounts, and money moving in from unfamiliar sources all need to be explained and documented, and unexplained deposits can hold up a file.
If family is gifting part of your down payment, get the gift letter signed and the funds into your account as early as possible.
6. DON’T SPEND YOUR CLOSING-COST CUSHION
Closing costs are separate from your down payment, and they add up fast. They include land transfer tax, which Toronto buyers pay twice (provincial and municipal), plus legal fees, title insurance, and property tax and utility adjustments. Lenders generally want to see about 1.5% of the purchase price set aside to cover these costs, so that money needs to still be there on closing day.
7. DON’T MISS A PAYMENT ON ANYTHING
Credit cards, car loans, student loans, phone bills. A single late payment that reports to the credit bureau at the wrong time can drop your score right when the lender takes another look. Setting up automatic payments until closing is a simple safeguard.
8. DON’T CO-SIGN FOR ANYONE
Co-signing a loan for a friend or family member makes you responsible for that debt. To a lender, it counts as your debt, even if you never make a payment on it. That can be enough to push your ratios past what the lender will approve.
9. DON’T GO QUIET ON YOUR TEAM
Your mortgage agent, realtor, and lawyer will likely need documents or signatures between now and closing. Send them the same day they’re requested, since delays can push back funding.
Also arrange home insurance at least a week before closing. The lender won’t release funds without proof of insurance, and your lawyer will need it on file.
10. DON’T ASSUME “APPROVED” MEANS “DONE”
An approval is a major step, but the mortgage isn’t finished until the lender funds it and you’re holding the keys. Until then, keep your finances steady.
WHAT IF SOMETHING HAS TO CHANGE?
Sometimes life doesn’t wait for closing day. A car breaks down, a job offer arrives, or a family member needs help. If something like this comes up, the key is to talk to your mortgage agent before you act, not after. Many changes can be managed when they’re planned for. Surprises are what cause problems.
The simple rule: if it involves money, credit, or your job, make a quick call first.
BUYING SOON?
If you’re getting ready to buy, or your offer just went firm and you have questions about what comes next, connect with me at 249-480-1249 and we’ll make sure your file stays on track through closing.
Call or text 249-480-1249. HumberBayMortgages.ca.
Simon Browning | Mortgage Agent Level 2 | BRX Mortgage 13463