Skip to content
ClosingCodeClosingCode
ENES

Credit · Fannie Mae Selling GuideNew credit during escrow: what happens when a buyer finances a car or a sofa before closing

Between contract and closing, buyers sometimes finance furniture, a car or appliances. Fannie Mae's Selling Guide requires the lender to review credit inquiries and confirm that the borrower hasn't obtained credit that isn't on the credit report or the loan application; if new credit was obtained, the debt must be verified and the borrower qualified with its monthly payment (B3-5.3-04). Many unrelated inquiries mean higher credit risk whether or not credit was actually granted, and many recent inquiries combined with newly opened or delinquent accounts mean high risk. For loans underwritten in Desktop Underwriter, additional debt disclosed by the borrower or found by the lender during the mortgage process – like a higher interest rate or lower verified income – triggers a resubmission to DU when the recalculated debt-to-income ratio exceeds 45%, or rises by 3 percentage points or more while staying at 50% or less (B3-2-10). Fannie Mae's examples: a DTI going from 35% to 40% or from 44% to 46% needs resubmission; 46% to 48% doesn't; 46% to 50% does. A resubmission can change the approval – or end it – days before closing.

What the lender does (B3-5.3-04, B3-2-10)

  1. 1. Reviews inquiries

    Checks the number and recency of credit inquiries for undisclosed credit.

  2. 2. Verifies new debt

    Any new account is verified and its payment counted in qualifying.

  3. 3. Recalculates DTI

    New debt, a higher rate or lower verified income changes the ratio.

  4. 4. Resubmits to DU

    If DTI now exceeds 45%, or rises 3+ points while at or under 50%.

Fannie Mae's resubmission examples

  1. 35% → 40%

    Resubmission required.

  2. 44% → 46%

    Resubmission required.

  3. 46% → 48%

    No resubmission.

  4. 46% → 50%

    Resubmission required.

What the TC can do

  • Remind buyers at contract and again before closing: no new credit, no co-signing, no big purchases on credit.
  • If a buyer already applied for credit, tell them to inform the lender right away.
  • Put the reminder in the introduction email so it's in writing.

Questions buyers ask

Can I open a credit card before closing on a house?

It can cause problems. The lender must confirm you haven't obtained new credit, and any new debt is verified and counted in your debt-to-income ratio (Fannie Mae Selling Guide B3-5.3-04).

What happens if my debt-to-income ratio goes up before closing?

On a DU loan, if new debt pushes the DTI over 45% or up by 3 points or more (at 50% or less), the loan must be resubmitted to DU, which can change the approval (B3-2-10).

Do credit inquiries alone hurt my mortgage approval?

The lender must check whether inquiries led to new credit; a large number of unrelated inquiries is treated as higher credit risk even if no credit was obtained.

Related guides and templates

ClosingCode's 'Loan approval update' email to the client already asks them to avoid new credit and large purchases until after closing – you review it and click send; nothing goes out on its own.

Start free trial

Sources: Fannie Mae Selling Guide B3-5.3-04, Inquiries: Recent Attempts to Obtain New Credit (April 1, 2009); B3-2-10, Accuracy of DU Data, DU Tolerances, and Errors in the Credit Report (December 4, 2019); B3-5.3-09, DU Credit Report Analysis (August 5, 2026) – read at selling-guide.fanniemae.com on October 26, 2026.

General information, not financial or credit advice. The lender decides. ClosingCode is software; it is not a lender. This guide is not a substitute for the advice or services of an attorney.