Does having too much available credit REALLY hurt your mortgage chances?

[KillingThemGingerly]

I have A LOT of available credit with quite a few credit cards. I ALWAYS pay my bills on time and even always pay the statement balance in full (credit score of about 800). 

I did a deep dive on the internet about if having too much available credit could be a red flag for mortgage lenders. I came across a bunch of threads on various forums, some old, some fairly recent, and some that were Canadian which idk if even applies to me since I am in the US. The answers were all over the place! In the not too distant future, I would like to buy a home. So is it true or not that having too much available credit actively can hinder your chance of getting a mortgage approval?

[NoMoreE46]

A Lot is subjective. 

Care to quantify your total CL and the number of cards?

[KillingThemGingerly]

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@NoMoreE46 wrote:

A Lot is subjective. 

Care to quantify your total CL and the number of cards?

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Probably about 200,000 over 15 cards (yes I know that's a lot). 

[NoMoreE46]

Given that the avg total CL is ~ $30,000,  yours is 6x more than the typical US consumer.   For perspective though, there is a MF user here with a $250,000 limit - on One card...

If you are shopping for a

mortgage, I would not close any cards Unless your loan officer advises so.  Typically, a lender may ask you to pay down certain debts to meet their monthly DTI standard.

[NoMoreE46]

Also a lot of lenders use older FICO versions.

[Revelate]

Not much for credit scoring, probably not at all for mortgage underwriting.  Proceed with confidence.

I did see that reason code on TU FICO 4 when I had 20 open tradelines, but even with 15 now I'm still over 800 on a mortgage pull and nobody says boo with an aggregate CL north of 250K.  Actually I don't see that reason code on my TU FICO 4 now, but it was never on either of the other two mortgage scores.

Doesn't matter rationally, I wouldn't worry about it.  I doubt there's even some weird overlay on this one, not on conventional or FHA loans.  Portfolio loans might be a little squirrely, but those are few and far between in the United States with the exception of jumbo loans and there 250K CL isn't a big deal.

[CreditCuriosity]

They don't care about too much available credit at all for mortgages at least conventional.  Now what they do care about is if they see what is owed going up while in UW process.  I had 700k+ in personal credit when going through mortgage process not an eye blinked or asked about.  Actually was the smoothest UW I ever went through on last mortgage that closed in june 2022.  No letter or explanations just typical forms such as tax returns, etc..

Note my middle mortgage scores was > 800 as well.  I even was allowed to apply for a CC before closing so I could start spending on stuff on new house given approval from loan officer/uw at this bank as they knew my scores were solid and be closed/sold before anything.   I did wait to switch to my new job until I closed though.  edit: I wouldn't be spending on stuff prior to closing like me I got permission due to scores/income/dti and various other factors that allowed for this.  

[TryItAgain]

Between major V,MC,D,AX cards, retail cards, and lines of credit I have over 500k avail over maybe 30-35 total accounts on personal. (Many more on business only credit). I have never run into a situation where having too much credit has affected me yet, although I am sure it could under some scenarios. If it did it would most likely happen with other credit card companies wondering why I wanted more credit.

I'm average 805-825 over the 3 major credit bureau Fico scores as of today but a lower 788 mid mortgage score. I had no problem obtaining a mortgage recently, the amount of available credit never came up. YMMV