topic Re: Applying for cc before mortgage in Credit Cards

Applying for cc before mortgage

bear812c — Sat, 28 Nov 2015 03:39:29 GMT

I'm planning on appliying for a mortgage in March 2016, so in 3-4 months. There is a credit card I am interested in having and I want to apply for it but I've read many times that you should never apply for credit within 6 months of applying for mortgage. Is this true? Should I hold out for the credit card or will it really even matter?

Re: Applying for cc before mortgage

TrialByFire — Sat, 28 Nov 2015 03:40:51 GMT

@bear812c wrote:
I'm planning on appliying for a mortgage in March 2016, so in 3-4 months. There is a credit card I am interested in having and I want to apply for it but I've read many times that you should never apply for credit within 6 months of applying for mortgage. Is this true? Should I hold out for the credit card or will it really even matter?

Hold off. It's only 3-4 months and mortgage tops the totem pole for most people.

Re: Applying for cc before mortgage

FinStar — Sat, 28 Nov 2015 03:45:27 GMT

@TrialByFire wrote:
@bear812c wrote:
I'm planning on appliying for a mortgage in March 2016, so in 3-4 months. There is a credit card I am interested in having and I want to apply for it but I've read many times that you should never apply for credit within 6 months of applying for mortgage. Is this true? Should I hold out for the credit card or will it really even matter?
Hold off. It's only 3-4 months and mortgage tops the totem pole for most people.

Agree. Wait until you close on the mortgage and the keys are in your possession.

Re: Applying for cc before mortgage

Anonymous — Sat, 28 Nov 2015 04:09:12 GMT

I would give a more nuanced answer!

Two factors: how much do you need the card (and will it go away soon) , and how close are your scores to a borderline for rates? If you are solidly in a bracket, an extra inq and a new account probably isn't going to change things

Now prudence might suggest that not apping is the safest thing anyway, unless the card is really great and is unlikely to be available with the current terms after the mortgage closes. This should be a high barrier, so getting $200 vs $100 on a Freedom probably shouldn't count for example. But I have applied for "great" cards shortly before a mortgage, and all that happened is I had to fill in an extra document explaining the inq, and whether it resulted in a new line of credit, and the monthly payments etc.

Re: Applying for cc before mortgage

deltatee — Sat, 28 Nov 2015 04:17:43 GMT

I would totally agree that you should wait. I personally app'd for my SM riget before my mortgage (wasn't really expecting it at the time) and it caused me a lot of extra stress. Not worth it.

Re: Applying for cc before mortgage

FinStar — Sat, 28 Nov 2015 04:19:36 GMT

@Anonymous wrote:
I would give a more nuanced answer!

Two factors: how much do you need the card (and will it go away soon) , and how close are your scores to a borderline for rates? If you are solidly in a bracket, an extra inq and a new account probably isn't going to change things

Now prudence might suggest that not apping is the safest thing anyway, unless the card is really great and is unlikely to be available with the current terms after the mortgage closes. This should be a high barrier, so getting $200 vs $100 on a Freedom probably shouldn't count for example. But I have applied for "great" cards shortly before a mortgage, and all that happened is I had to fill in an extra document explaining the inq, and whether it resulted in a new line of credit, and the monthly payments etc.

Very good points LTL. I guess it would depend on the OPs overall scores/profile.

Re: Applying for cc before mortgage

TrialByFire — Sat, 28 Nov 2015 04:20:26 GMT

@Anonymous wrote:
I would give a more nuanced answer!

Two factors: how much do you need the card (and will it go away soon) , and how close are your scores to a borderline for rates? If you are solidly in a bracket, an extra inq and a new account probably isn't going to change things

Now prudence might suggest that not apping is the safest thing anyway, unless the card is really great and is unlikely to be available with the current terms after the mortgage closes. This should be a high barrier, so getting $200 vs $100 on a Freedom probably shouldn't count for example. But I have applied for "great" cards shortly before a mortgage, and all that happened is I had to fill in an extra document explaining the inq, and whether it resulted in a new line of credit, and the monthly payments etc.

The less scrutiny the better, for my profile anyways lol. I think most would agree a mortgage trumps a cc anyday, and to risk falling in to a different % bracket (or worst case failing to qualify, depending on OP profile) is a risk I personally wouldn't take.

Re: Applying for cc before mortgage

bear812c — Sat, 28 Nov 2015 04:35:23 GMT

I don't need it, just want it. Thank you for the advice. You're right, less stress is better. I'll wait it out.

Re: Applying for cc before mortgage

Anonymous — Sat, 28 Nov 2015 15:41:28 GMT

@TrialByFire wrote:
@Anonymous wrote:
I would give a more nuanced answer!

Two factors: how much do you need the card (and will it go away soon) , and how close are your scores to a borderline for rates? If you are solidly in a bracket, an extra inq and a new account probably isn't going to change things

Now prudence might suggest that not apping is the safest thing anyway, unless the card is really great and is unlikely to be available with the current terms after the mortgage closes. This should be a high barrier, so getting $200 vs $100 on a Freedom probably shouldn't count for example. But I have applied for "great" cards shortly before a mortgage, and all that happened is I had to fill in an extra document explaining the inq, and whether it resulted in a new line of credit, and the monthly payments etc.

The less scrutiny the better, for my profile anyways lol. I think most would agree a mortgage trumps a cc anyday, and to risk falling in to a different % bracket (or worst case failing to qualify, depending on OP profile) is a risk I personally wouldn't take.

Yes, but I am saying make an informed decision. Some cards are SO good (5x TYP in my case) that is there is no reasonable risk of changing brackets, it IS worth going for. But much more important than ccs is shopping around for best rates, IME on the internet. That is going to save much more money.

Re: Applying for cc before mortgage

Anonymous — Sat, 28 Nov 2015 18:08:23 GMT

i would list your 3 scores, AAOA, inquiries, and utilization.

My aunt and uncle just got a refi because of me. I have had my aunt churning cards all year since may. They approved them for 3.125% for 15 years...the woman said when your scores are above 740 and your utilization is below 30% it really doesnt matter. I had no clue their mortgage was almost 9% until a few weeks ago. By then the credit card damage had already been done....

Now the strange thing was hearing her say all these good things. Maybe because its a credit union? But everything that I have read said they look at open cards as debt risks...... I will say after this experience that its your safest bet to always wait... but its not the end of the world if u do apply.

Profiles were 13 years AAOA, Uncle had 0 inquiries, no new accounts for a few years, Aunt had at least 8 inquiries in the last 6 months, opened a citi, chase, barclays, 2 amex cards, and a few others.

Took middle score of one, middle score of the other, average was 740 on the dot, 15% utilization.

What is the card you want, why do you want it, and how will it help you save money or improve your scores?

Re: Applying for cc before mortgage

Anonymous — Sat, 28 Nov 2015 19:16:07 GMT

Don't do it 👎

Re: Applying for cc before mortgage

takeshi74 — Sat, 28 Nov 2015 21:01:25 GMT

@bear812c wrote:
There is a credit card I am interested in having and I want to apply for it but I've read many times that you should never apply for credit within 6 months of applying for mortgage. Is this true? Should I hold out for the credit card or will it really even matter?

It's generic advice and for those that want to play it safe. It all really depends on your credit profile and the creditor (as does everything). If your profile is strong enough and youtr creditor lax enough it may not matter. If your profile isn't strong enough and/or your creditor more cnservative then it can certainly matter. It's not a one-size-fits-all thing. I had a new card report 6 months prior to a mortgage approval and still got the best terms. However, if your credit isn't similar enough and you're not using Chase then that anecdotal evidence probably won't be relevant to you..

You definitely want a good grasp of where you stand and your mortage lender's requirements before you apply.