You've Been Warned: This Kind Of Purchase Could Sink Your Mortgage Approval

The average fixed-rate mortgage in the United States has been on the rise in recent years, with the Federal Reserve Bank of St Louis citing it at around 6.3% as of October 2025 — over double where it sat in 2021. Consequently, the number of homeowners has decreased, with only 65% of people owning homes in Q2 of the same year. This trend has led to an environment where new home buyers are stuck between skyrocketing mortgage rates and a dwindling supply of new homes. While economists forecasted a strong year for the housing market in 2025, this has not come to pass. The current reality for many Americans is that a new home is harder to come by than ever, and a strong mortgage rate can be the make-or-break factor in purchasing a home.

How you spend while applying for a mortgage can influence your rate heavily, and there are several purchases that will greatly affect your mortgage approval. Luckily, the general rule is pretty simple: While in the mortgage approval process, you should hold off on buying anything that requires financing or payment in installments. Depending on your liquid assets, this could mean anything from a boat to a new couch, as these may be red flags for lenders. So, you'll want to time any major purchases strategically in the years leading up to your mortgage application, or wait until after you close on your new home to pull the trigger on something else.

When it comes to building credit, a watershed mark is reaching a score above 800, as it can mean lower interest rates. When it comes to buying a home, this is still the case, and many factors can adjust and negatively affect your credit. One major factor is your purchasing behavior while you're in the mortgage approval process. If you are still a few years out from buying your home, now might be the best time to opt for a new car, particularly one of the ten least expensive cars available in 2025. That way, you have time to make payments on the car and potentially improve your credit ahead of the mortgage application process, instead of hurting your chances during the approval process. 

While not all credit cards cost money to open, setting up a new card or opening a new line could similarly affect your rate. Credit as a whole is a balancing act, as you should by no means halt regular purchases you make with credit — that would also negatively affect your score and consequently your rate. Ultimately, in a turbulent and uncertain housing market, making sure you are actively building credit in anticipation of financing a home is increasingly important. Putting your feet up on a fancy new sofa? Not so much.