That's partially why I think it's always a good idea to clear 100% of your credit card debt off before even thinking about a mortgage (for purchase). I know for re-fi the situation is totally different, but the scores still matter, and you have to show financial stability. It doesn't look good to FICO if you have a scared CC that is balance chasing you, whether you triggered it or not.
The defensive game to play in that case is to gradually pay down the CC balance and build up savings, then when you get closer to needing to app, wipe the CC debt off and take the hit on your cash position or if that would jeopardize your approval standing, wipe the CC down to at least 10% utilization at minimum and wait a statement cycle for the FICO points to come back.
Every single FICO point counts, especially if you're very close to one of these two crucial FICO lines:
640 - minimum for FHA. This is now the bare minimum, so you need to have 15 points extra as a safety once the first mortgage inquiry hits your FICO. You might take a point loss on your first mortgage app, but you won't for subsequent ones as long as the apps are within a few weeks time of each other.
740 - general minimum for the lowest rate 0-point mortgages. Some lenders set their best rates at 720, some at 730 and some as high as 760, but a rule of thumb is you'll find the best rates once you're above 740.
