When to stop applying for CCs to get a mortgage?
Feb 20, 2014 | 9:01 am
#1
Original Poster
Join Date: Jul 2012
Location: NYC
Programs: Airline independent, Hilton Diamond, IHG Plat
Posts: 170
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?!
Feb 20, 2014 | 9:56 am
#2
Join Date: Feb 2012
Location: LAX
Programs: AA, TY, UR, UA, US, WN, MR, SPG
Posts: 1,453
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?!
Feb 20, 2014 | 1:29 pm
#4
Join Date: Feb 2013
Location: San Antonio
Programs: AS MVP
Posts: 2,276
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.
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.
Feb 20, 2014 | 1:34 pm
#5
Join Date: Nov 2013
Location: DCA/IAD
Programs: HH Gold-IHG Plat
Posts: 390
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.
Ill let you know what the lender says when we met with them in the upcoming weeks.
Feb 20, 2014 | 3:08 pm
#6
Join Date: Feb 2013
Location: NYC
Programs: UA 1K, AA EP, Hyatt Diamond, SPG Platinum, M life Noir
Posts: 1,279
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.
Feb 20, 2014 | 3:42 pm
#7
Join Date: Sep 2013
Programs: AS, AA, UR, SPG,
Posts: 101
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...
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...
Feb 20, 2014 | 5:32 pm
#8
Join Date: Dec 2013
Posts: 546
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.
Feb 20, 2014 | 8:21 pm
#9
Original Poster
Join Date: Jul 2012
Location: NYC
Programs: Airline independent, Hilton Diamond, IHG Plat
Posts: 170
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...
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...
Feb 20, 2014 | 8:25 pm
#10
Join Date: Feb 2012
Location: LAX
Programs: AA, TY, UR, UA, US, WN, MR, SPG
Posts: 1,453
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.
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.
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.
Feb 20, 2014 | 9:15 pm
#11
FlyerTalk Evangelist
Join Date: Aug 2002
Location: Intermountain West
Programs: Too many to list
Posts: 12,743
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?!
Feb 20, 2014 | 9:41 pm
#12
Join Date: Aug 2011
Location: The Phoenix Desert
Programs: Hilton Cubic Zirconia, Marriott Fools Gold
Posts: 1,692
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.
Feb 21, 2014 | 7:01 am
#14
Join Date: Oct 2011
Location: Boston
Posts: 137
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.
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.