Being Smart About Your Dallas Mortgage Loan Between Approval and Closing

Getting approved for a loan on your first Dallas home can be an incredibly exciting step in the process of becoming a new homeowner.  But for many first-time homeowners, this jubilation can often influence rash financial decisions.  It’s natural to want new things to go along with your new home, such as expensive appliances and furniture, but big spending before you close on a loan could end up complicating the entire mortgage process, if not negating your loan’s approval altogether.

It’s standard policy that when a loan is about to be closed on, many lenders will look into a buyer’s credit history between approval and closing.  This policy has, in fact, been mandatory for all Fannie Mae lenders since 2010, according to a recent article in the New York Times.  If a lender sees that you’ve had any recent credit inquiries, chances are that your loan approval could be delayed or even denied.

Of course, this scenario applies more to those with high debt-to-income ratios than to borrowers who are extremely sound financially.  Fannie Mae has set guidance that 45 percent or less of a household’s income is going into home payments and other monthly debts each month in order for approval on a loan.  It’s important for borrower’s to be aware that these numbers can change between approval and closing, and making huge credit investments is one way in which a debt-to-income ratio can adversely affect the buyer.

Another thing to keep in mind is how debt-to-income ratios play into a couple signing on a loan.  If there are two or more earners moving into a house with a loan that is close to the 45 percent line, it’s wise to make sure that if one of them is not named on the loan, than that person should be the one making major purchases between approval and closing.  Or, to simplify things, it’s wise to put both couples on a loan so that debt-to-income concerns never even arise.

If you are interested in Dallas home for sale and would like to hear about how you can best optimize a Dallas mortgage loan, please contact our team of Dallas mortgage professionals.