Clients may be financially prepared to buy a home, but even minor missteps during the mortgage process can lead to delays, denials, or higher costs. The period between pre-approval and funding is critical. As their financial advisor, you’re in a key position to guide them away from decisions that could disrupt their homeownership plans.  Be your clients’ hero and help them keep their dream of homeownership alive by avoiding these 10 common mortgage financing mistakes.

The 10 Home Financing Commandments 

When it comes to securing a mortgage, what your clients do after pre-approval matters just as much as what they did to get there. Even seemingly minor financial decisions can trigger a requalification or derail the entire deal. That’s why it’s critical to ensure clients understand and follow these 10 home financing commandments from the moment they’re approved until the loan is funded. Each rule is designed to protect their eligibility, maintain lender confidence, and keep their long-term homeownership goals on track.

Do not change jobs or reduce hours

Lenders require employment stability. Changing roles, even within the same company, or switching to part-time work, can trigger re-qualification, which may delay approvals or reduce borrowing capacity. For clients relying on variable or self-employed income or commissions, the risk is even greater.

Do not buy or lease a car, truck, or boat (unless you plan to live in it)

New auto loans or leases significantly increase debt ratios. Even $500/month can reduce a client’s mortgage qualification by tens of thousands. In high-ratio or stretched budget scenarios, this can mean losing financing altogether.

Do not max out your credit cards

High credit utilization can quickly drop credit scores, affecting both the interest rate and the approval decision. A client may qualify for pre-approval but get declined for funding due to changes in their credit profile.

Do not close any credit accounts, even with $0 balances

Closing long-standing accounts lowers available credit and can reduce the average age of credit history, two key factors in credit scoring. This mistake can lower your clients’ credit score and affect their mortgage pricing.

Do not spend your down payment or closing costs money

Funds earmarked for the mortgage must remain untouched, traceable, and consistent. Any shortfall, even a temporary one, can halt the deal or require resubmission with new proof of assets, thereby delaying funding.

Do not finance furniture (or anything else)

Deferred payment plans or buy-now-pay-later (BNPL) promotions are still considered debt. Lenders factor these into debt servicing ratios, potentially reducing the mortgage amount your client qualifies for.

Do not become self-employed (if not already)

Even a promotion to independent contractor status counts as becoming self-employed. Mortgage lenders typically require two full years of self-employment income for mortgage qualification, which could result in a delay of several years before homeownership becomes viable again.

Do not make any undocumented deposits into your bank account

Large deposits without source documentation (e.g., cash gifts, transfers) can be flagged for anti-money laundering (AML) checks. If the lender can’t verify origin, those funds can’t be used for the mortgage, potentially putting the transaction at risk.

Do not shuffle your money around

Transferring funds between bank accounts during underwriting complicates your clients’ audit trail. Lenders may require updated bank statements and re-verification, which can lead to processing delays and even last-minute suspensions of approval.

Do not co-sign for anyone on any type of loan

Co-signing makes your client fully responsible for someone else’s debt. Lenders include this liability in debt service ratios, which can drastically reduce the mortgage amount your client can borrow or push them over affordability thresholds.

Be the Advisor Who Shields Clients From Mortgage Missteps

The mortgage process doesn’t just hinge on rates and credit; it hinges on timing, awareness, and having the right professionals in place to support your clients’ journey. As their trusted financial advisor, you’re often the first to hear about life changes: a new car, a job shift, a gift from family. Each of these could unknowingly disrupt mortgage approval or increase borrowing costs if not managed properly.

That’s why it’s crucial to remind your clients early in the process: “If you’re not sure whether something affects your mortgage, ask before you act.” A simple check-in before a financial move can mean the difference between a smooth closing and a lost opportunity. The sooner your trusted mortgage partners are looped in, the more options and time your clients have to stay on track.

At nesto, we work hand-in-hand with financial advisors to safeguard client approvals and align home financing with long-term financial planning. From rate holds to underwriting, our mortgage experts ensure your clients are guided with precision before, during, and after funding.

Want to prevent financing disruptions before they start? Partner with nesto mortgage experts today to integrate seamless mortgage strategies into your client’s broader wealth plan.

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Why Choose nesto

At nesto, our commission-free mortgage experts, certified in multiple provinces, provide exceptional advice and service that exceeds industry standards. Our mortgage experts are non-commissioned, salaried employees who provide impartial guidance on mortgage options tailored to your needs and are evaluated based on client satisfaction and advice quality. nesto aims to transform the mortgage industry by providing honest advice and competitive rates using a 100% fully digital, transparent, seamless process.

nesto is on a mission to offer a positive, empowering and transparent property financing experience – simplified from start to finish.

Contact our licensed and knowledgeable mortgage experts to find your best mortgage rate in Canada.

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