Applying for credit card while in Mortgage process..

[mrfarias]

Since being pre approved for FHA I applied and was approved for 2 credit cards my agent is ready to send everything to my bank how can this affect me ?

[Mike_B03]

I guess first question would be...why would you do that? Second would be, have you charged anything on them or do they have a $0 balance?

If you haven't charged anything, then it may affect you if it lowered your credit scores, and it most likely did (inquries + altered your average age of accounts, both things that lower your credit score). How much your credit score dropped and what score you need for your particular loan, I dont know. You will also most likely need to provide a letter of explanation stating that you applied for new credit but did not incure any new debt.

If you have used the cards and there is a balance on them, then not only will it change your credit score (same as explained above) but it will also change your debt-to-income ratio that is used for the loan, unless you did a balance trafser from another car (and that old card is now reporting $0 balance).

[raisinitup]

Yep, never want to do that. The goal is to keep your credit picture as consistent as possible while going through this process. The lender is watching your every move and one misstep could set you way back.

[MainMan]

Why did you even consider doing that? There has to be a reason behind it. Bottom line is it isn't good and can and probably who'll effect u

[mrfarias]

I realized it was a stupid but can you guys please tell me how can it affect the app ? 

[kdmitchell27]

You can't fix it. As soon as they post on your credit report as a new inquiry the lender will question it. If it was another mortgage lender that's one thing but if it was for a line of credit such as credit cards, well just get ready to explain why you did it.

And hopefully it doesn't affect your DTI.

[Mike_B03]

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@mrfarias wrote:

I realized it was a stupid but can you guys please tell me how can it affect the app ? 

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Did you read my reply?

[raisinitup]

Sorry, we're not beating up on you, that's just a bad idea but you can't take it back at this point. Let your LO know and ask if it has or will alter your pre approval.

[MainMan]

If the inquiry drops your score , which it normally does, you have to hope it doesn't put you lower than the required score. Are you going FHA or Conventional?

[MovingForward_2012]

I applied and was approved for a Chase Freedom a few days before applying for mortgage preapproval. The mortgage lender called Chase with me on the line to verify the card had a zero balance. My LO told me before this to not use the card until after closing and my fico score at the time was 703 so I wasn't worried.

Let your LO know right away. Did you charge anything on the cards? What is your DTI without the new cards?

I'm not going to sugar cost the situation. The worst thing that can happen is a denial due to DTI being too high after the new CC debt is added.

If you exceed the approvable DTI ratio, there is a slight chance you will still close IF they don't do a credit repull right before closing.