Avoid these mistakes between loan approval and closing

You've been careful with your finances, saved for a downpayment, and finally received approval for a mortgage loan. It’s time to celebrate, right? Not yet. Your lender will recheck your credit right before closing. Don't give him or her reason to question your creditworthiness by making these mistakes: 1. Changing jobs Changing employers could mean delays due to employment and salary verifications. Of course, you shouldn't ignore a great career opportunity. It means only that optional moves should wait. 2. Making a big purchase Your debt-to-income ratio is an important factor when being considered for a loan. If you add to your debt by purchasing a car or boat, you risk exceeding the ratio that your lender finds acceptable. 3. Opening credit accounts You might apply for a credit card so you're ready to buy furniture for your new house. But similar to taking on new debt, applying for a new credit account can harm your mortgage approval. The credit inquiry necessary for the new account will ding your credit score a few points, and the lender might wonder just how much you plan on spending with that new account. Part of the mortgage process is a final check to ensure you can afford the loan. Neither you nor the lender wants the payments to be a struggle, so don’t give the lender any reason to doubt your creditworthiness. There are other ways a transaction can fall apart before closing. Be sure to consult with your Texas REALTOR® about contract deadlines and other to-do items to ensure you close on your new property.

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Can you trust online price estimates for your home?

Have you ever entered your address into a website that claims it will tell you how much your property is worth right now? And have you ever been shocked at the number it calculates? As it turns out, many of those websites don’t have access to important information about your property and instead use data that might not be so accurate. In fact, these popular websites explain the limitations with their own data in their disclaimers—which you can read for yourself in this free flier. A Texas REALTOR® is the best source for real estate information online or in person, especially when it comes to helping you determine how much your home is worth. They also have a lot of other useful advice about buying, selling, or leasing property in Texas, and they’ve shared some of it for this free guide, Now that’s a smart move. Check it out and then contact a Texas REALTOR® for more useful—and accurate—information.

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What to know about student debt and homebuying

A couple of friends of mine are having a year full of major life milestones: Their wedding this fall is quickly approaching. One of them just finished her first year of teaching after going back to school for a master’s degree. And, now, they’re closing on their first home this month. They were able to make it all happen, but for many who are in similar situations, the idea of buying a home after incurring a significant amount of student debt, whether from undergraduate or graduate programs, can seem like a major challenge. A new survey from the National Association of REALTORS® reported that 71% of non-homeowners polled believe that student debt is delaying them from buying a home. Much is made of millennials' homeownership trends and preferences, but only recently has the effect of student debt started to garner more attention. Senator Elizabeth Warren addressed the topic specifically during the 2016 REALTORS® Legislative Meetings in Washington, D.C., last month. From an individual standpoint, one of the most important things to keep in mind when entering the homebuying process with student debt is your debt-to-income ratio. It’s not always calculated quite the same—sometimes student debt is included as a percentage of the current balance rather than monthly payments—but generally, it’s the percentage of monthly income that’s spent on all debts (auto loans, credit cards, etc.), not just student loans. In the case of my friends, they were lucky enough to have a lender who worked with them to lower that ratio to the point where they could qualify for the home they had in mind. Some common ways to lower your debt-to-income ratio include paying down credit cards, getting car loans down to 10 payments or fewer (the point at which some lenders will exclude it from the ratio), finding new sources of income (can you add freelance work?), or if you have a partner, moving debt around might be an option. A debt-to-income ratio of 36% or less is ideal, but in some cases lenders will consider up to a 43% ratio. Your REALTOR® may suggest other ways that apply to your situation. It can be hard to reduce your debt-to-income ratio while paying student loans—not to mention saving for a downpayment—but taking the long view of your finances and managing your ratio now can pay off in the future when you’re ready to start the homebuying process.