topic Re: Applying for a credit card prior to mortgage refinancing? in Credit Cards

Applying for a credit card prior to mortgage refinancing?

Anonymous — Tue, 13 Jan 2015 18:02:36 GMT

My parents are planning on refinancing towards the end of this year but currently only have a Capital One Quicksilver card (which they got a bit over 1 year ago) and would like something else. Is it best for them to hold off until after the refinance?

Re: Applying for a credit card prior to mortgage refinancing?

Anonymous — Tue, 13 Jan 2015 18:09:12 GMT

@Anonymous wrote:
My parents are planning on refinancing towards the end of this year but currently only have a Capital One Quicksilver card (which they got a bit over 1 year ago) and would like something else. Is it best for them to hold off until after the refinance?

Really depends on their (04) scores. If they are good enough for a good rate, I wouldn't bother till after. But if they are low, and one reason is not enough revolviing credit, it might be worth getting one card ASAP. The inq will start wearing off in impact, and the new TL would have time to report.

Re: Applying for a credit card prior to mortgage refinancing?

Anonymous — Tue, 13 Jan 2015 20:58:19 GMT

I can't speak for their 04 scores but their 08 scores aren't very high, around 670 I believe. The Quicksilver was their first card in a long time as an attempt to raise their scores.

Re: Applying for a credit card prior to mortgage refinancing?

-Wade- — Tue, 13 Jan 2015 21:06:17 GMT

@Anonymous wrote:
I can't speak for their 04 scores but their 08 scores aren't very high, around 670 I believe. The Quicksilver was their first card in a long time as an attempt to raise their scores.

What is reporting on their reports as for a trade lines?( in other words how many open trade lines )

EDIT: Have they ever had an AMEX account?

Re: Applying for a credit card prior to mortgage refinancing?

Kenny — Tue, 13 Jan 2015 21:11:31 GMT

Sounds like a new card will not do anything good for their scores. I'd hold off unless like Wade says.. there's an ungodly backdate for them. lol

Re: Applying for a credit card prior to mortgage refinancing?

DaveInAZ — Tue, 13 Jan 2015 21:53:51 GMT

@Anonymous wrote:
My parents are planning on refinancing towards the end of this year but currently only have a Capital One Quicksilver card (which they got a bit over 1 year ago) and would like something else. Is it best for them to hold off until after the refinance?

I've always read that you should never apply for any new credit within 6 monts of applying for a mortgage. And in my past mortgage applications I remember having to write a letter explaining any new inquiries on my credit report. For a new mortgage they want to make certain they have the DTI (debt to income) ratio right & solid, they don't want a new account floating around out there that you've racked up a bunch of debt.

I don't have a crystal ball, but I think your parents would be making a mistake waiting until the end of the year to refinance. The Federal Reserve is likely to stat increasing interest this summer, and with the tanking of oil prices inerest rates haved moved down significantly the last month or so, mortgage rates are currently near all time lows since the 2008 recession. You have to wait 4 years after a Ch7 BK for a conventional mortgage - that Jan. 31 for me, so Feb. 2 I start firing off applications to refinance my mortgage.

If one is thinking about refinancing a mortgage this year, I think now is the time.

Re: Applying for a credit card prior to mortgage refinancing?

Chris679 — Tue, 13 Jan 2015 22:00:22 GMT

@DaveInAZ wrote:
@Anonymous wrote:
My parents are planning on refinancing towards the end of this year but currently only have a Capital One Quicksilver card (which they got a bit over 1 year ago) and would like something else. Is it best for them to hold off until after the refinance?
I've always read that you should never apply for any new credit within 6 monts of applying for a mortgage. And in my past mortgage applications I remember having to write a letter explaining any new inquiries on my credit report. For a new mortgage they want to make certain they have the DTI (debt to income) ratio right & solid, they don't want a new account floating around out there that you've racked up a bunch of debt.

I don't have a crystal ball, but I think your parents would be making a mistake waiting until the end of the year to refinance. The Federal Reserve is likely to stat increasing interest this summer, and with the tanking of oil prices inerest rates haved moved down significantly the last month or so, mortgage rates are currently near all time lows since the 2008 recession. You have to wait 4 years after a Ch7 BK for a conventional mortgage - that Jan. 31 for me, so Feb. 2 I start firing off applications to refinance my mortgage.

If one is thinking about refinancing a mortgage this year, I think now is the time.

I agree with you about the interest rate but you are also overlooking the appraisal. All markets are unique of course but in my area now is a terrible time to get an appraisal with selling prices way down.

Re: Applying for a credit card prior to mortgage refinancing?

DaveInAZ — Tue, 13 Jan 2015 22:15:24 GMT

@Chris679 wrote:
I agree with you about the interest rate but you are also overlooking the appraisal. All markets are unique of course but in my area now is a terrible time to get an appraisal with selling prices way down.

You have a good point about market conditions & appraisal value. But what part of the country are you in? I'm in southern Arizona and prices for existing homes are very soild. Zillow has my home valued at $10k more than last fall.

Re: Applying for a credit card prior to mortgage refinancing?

Chris679 — Tue, 13 Jan 2015 22:28:29 GMT

West central wisconsin, zillow has dropped 13k for me during that same time period. Was looking to have PMI removed after I finish some big improvements but it will have to wait now.

Re: Applying for a credit card prior to mortgage refinancing?

DaveInAZ — Tue, 13 Jan 2015 22:48:06 GMT

@Chris679 wrote:
West central wisconsin, zillow has dropped 13k for me during that same time period. Was looking to have PMI removed after I finish some big improvements but it will have to wait now.

Ah, sounds like a season thing, folks don't like trudging through snow to look at a house to buy. Winter is a good home buying time in AZ, and especially southern AZ - we have alot of snow birds from your part of the country, with wives saying "Look, George, if we buy a house here you'll never ever have shovel snow again!"

Hopefully your prices rebound in the spring and rates stay low long enough. Good luck! I always hated PMI. My mortgage was only 70% LTV when I took it out in March 2006, and I think 65% LTV refi will be enough for me - I also hate big house payments.

Re: Applying for a credit card prior to mortgage refinancing?

bada_bing — Wed, 14 Jan 2015 02:44:23 GMT

If your parents are anticipating any stumbling blocks with credit score, refi approval, apr rates, pmi requirements, etc., it could be useful to have a sit down with a good mortgage broker. A good broker can help with proactively ironing out any rough spots if you give them a little time for their advice to work. I'd definitely start looking for a good mortgage broker now, even if the planned application was many months off.

Conversely, if they think they are solid with the Refi application, you can do a little bit better on mortgage rates going through an online brokerage service, but be warned there isn't much handholding through the application process with them. I went through a refi with aimloan.com about 2 years ago and have no complaints at all. My profile was in good shape though and I have previous experience with mortgages. I wouldn't go that way if I antcipated any holdups.

No one can predict the future, but I agree with the guess that mortgage rates will move higher this year. Even if it takes them a while to start rising, it is a near certainty they won't move any lower without a depression hitting. I'd be actively working on getting my profile in shape to apply and would pull the trigger as soon as I had everything optimized.