When to stop applying for CCs to get a mortgage?
 

I know that wisdom is you can't be applying for new CCs when you've got a potential mortgage on the horizon... but are there any hard and fast rules about when you have to stop? For instance, if I plan on buying a house next January, should I stop immediately? 6 months before I meet with a lender? Is it too late?!

From everything I've read, I've seen advice ranging from 6-18 months. I plan to stop a minimum of 12 prior. I'm the cautious type, though. To me, no credit card bonus is going to be worth ANY interest rate hit on a 15-30 year loan. You'll pay many times over whatever bonus you are getting if the bank penalizes you even a quarter %.

Depends on your credit score. If you are really close to 800, I would not worry about it too much. If you are below that, you may want to stop to let your score rise as hard inquiries fall off your record.

I suspect that the best answer depends on a whole host of factors including length of credit history, other loans, previous mortgages, other relationships with the lender and down payment amount among other things.

Some opinions - a new mortgage from the credit union that holds your current one which is being paid off as you sell your house and move? 6 months if that. First mortgage for a recent college grad with substantial student loans? 18+ months.

looking at buying at the end of this year sometime early next, and my last app was in Jan. This would be my 2nd mortgage first with my wife.

Ill let you know what the lender says when we met with them in the upcoming weeks.

Depends on the lender. With retail banks it's almost entirely FICO-based, and you can have a very high (760+) score with several HPs on your file. Portfolio and private bank lenders often look at your actual credit report and will simply ask you to explain if you have lot of HPs. I do not know of any banks/lenders that have strict "rules" on HPs.

Basically, I spoke with a mortgage loan officer a personally know, and it's about the whole picture. So what if you have a lot of HPs.
a) Credit score - 740 and up
b) Credit history - solid years
C) Amount of debt...( No...auto loan, credit card balances, student loans)
d) Down payment - 20%
e) income - good
f) emergency fund - 3-6 months of cash reserves.

that's the whole picture, not just recent hard pulls...

Not sure about the OP, but I have a $100,000 loan. 1% annual would be $500 per six months.

In the last six months:

Chase Ink Business: $600
Southwest Business: 50,000 pts. X 2 for companion pass = $1,000
Southwest Personal: 50,000 pts. X 2 for companion pass = $1,000
Barclay Arrival: 44,000 pts = $440
Capital One Venture: 50,000 pts = $500.00
Amex Blue Cash Preferred: $200

That is over $3,700 worth of cash and travel bonuses in just the last six months.

Yeah that's a good point. I've got most of those covered, now that I'm in my 30s and OLD.

That's why I specified 15-30 year loan. I'm also from southern california, where a 100K loan is maybe enough to redo your kitchen and bath, not buy a house. But that was an assumption on my part.

Even with a 100K loan:

4.25% = $77,098 in interest paid
4.50% = $82,407 in interest paid

So the cost of a quarter-point interest penalty over 30 years on a $100K loan is $5309. Make it a 1% penalty and it becomes $21,695. Make it a $350K mortgage (for us SoCal folk) and it becomes $75,933.

I guess the moral of the story is, do your homework, run the numbers, and evaluate your risk tolerance. For me, in southern california, I am going to be beyond careful.

Talk to a lender now and ask the questions. I talked to US Bank about a refi and they said they don't like to see more than 1 hard pull in the last 6 months. Other lenders may be more tolerant.

I refi'd with WF this past summer and had just been approved for 4 cc's 2-3mos prior to applying (this was just as I was learning about AoR's and mortgage rates were so low I was willing to risk not waiting 6mos after my HP's). I had to write a brief 2-3 sentence statement for each new account explaining why I had so many new accounts. Didn't cause any problems for me but I also had my original mortgage with WF for the 10 years prior so that probably helped a bit.

What about other hard pulls, like getting an auto loan before a mortgage?

When I got my mortgage in September I had opened cards like that 100k amex platinum offer in January (was looking for houses all during march and on...). They were only a little concerned with the apps, but I was honest and just said I was doing it for the credit card signups. After saying that did not even need to do a written statement.

I did need to write a written statement though as I made a mistake and let a balance go to the bill stage, therefore it got reported to the credit reports that I had 5k in credit card debt, when in reality I paid it off. I had to write a statement assuring it was paid and to provide said statements.

it all depending on how the rest of your credit report, and downpayment. i got a 2.75% mortgage after having 12+ inquires and 11 new credit accounts in the prior six months.