When a home purchase doesn’t close, most people assume it was because of the interest rate. In reality, that’s usually not the reason. What I’m seeing lately is something different — small changes during escrow that create big problems in underwriting.
1. Opening New Debt During Escrow
This is still the biggest one. Buyers sometimes finance a car, open a new credit card, buy furniture on store financing, or co-sign for a family member. Even if the payment seems small, lenders re-check credit before closing. A new monthly obligation can push debt-to-income ratios over the limit.
The safest move? Don’t open or finance anything until after your loan closes.
2. Job or Income Changes
Even positive changes can create delays. Switching employers, moving from W-2 to 1099, or receiving a new compensation structure can require new verification. Lenders qualify you based on documented, stable income. If you’re thinking about a job change, talk to your lender first.
3. Large Bank Deposits Without Documentation
When underwriting reviews your bank statements, any large deposit needs to be explained. Transferring funds from another account, receiving money from family, or selling crypto all require a clear paper trail. Documentation matters more than most buyers realize.
4. Condo-Specific Issues
If you’re buying a condo, the property itself also has to qualify. HOA financial weakness, insurance gaps, pending litigation, or low reserve funds can create problems.
The Big Takeaway
Most transactions don’t fall apart because buyers weren’t qualified — they fall apart because something changed. Keep your financial picture stable during escrow, and always communicate with your lender before making changes. A quick conversation can prevent a major delay.