Mortgage Application - No Credit Cards

[Michizane]

3.625% is good for a middle score of 659. I had a 666 and my current APR quotes are a bit higher from 2 places. And no, I wouldn't open a credit card at this point. It would have been great if you opened one a year prior. Now, the inquiry will sting your mortgage score and it could be flagged for explanation when you get to underwriting. 

[Anonymous]

Thank you all for the advice!

So am I better off waiting for the charge offs to fall off in 3 years and refinance then?

[Michizane]

Yes, wait for the charge offs to fall off and get a credit card or two after you close. By the time your charge offs fall off, you will have history with the cards and the credit card inquiries should have fallen off your report as well. Your mortgage scores should be great with no derogatory items and credit cards with low balances and practicing AZEO. Then you can see how interest rates are then refinance.

[ldkcivilservant]

I think you need to reset your expectations. With your MMS and COs on your account you simply aren't going to get the best rates.

I agree that with your profile 3.625% ain't too shabby at all. My 750+ with no derogs only got me 3.5% 18 months ago.

[tooleman694]

There was a recent thread on here where the poster had no open credit cards. He opened one up and his scores soared.

However the poster did it to just get his score up enough to get approved.

[AllZero]

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@tooleman694 wrote:

There was a recent thread on here where the poster had no open credit cards. He opened one up and his scores soared.

However the poster did it to just get his score up enough to get approved.

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This the post?

https://ficoforums.myfico.com/t5/Mortgage-Loans/HELP-NEED-4-Points-on-TRANS-FICO4/td-p/6307597

[tooleman694]

That is the one.

[jmw1]

You didn't list the costs, discount points/lender credit so we don't know what your rate really is.  It could be 2.65% 30 year and it would have a bunch of discount points and fees.  It could be a 4.65% rate 30 year with a huge giant lender credit to give you no cost no fees. They're both the same.  If 3.65% is par, it is a bit on the high end but maybe not for a 659.  The next 10 points or the next 50 points will help a lot.  When you shop for real for a mortgage, make sure you use multiple loan brokers to get the best rate. Your bank or credit union are unlikely to give you good rates or good service. 

I don't want to be blamed if this blows up. But this is what I would do. 

I'd get a credit card with a prequal approval and put a balance of no more than 7% of the credit line reporting.  Keep it at the same balance every month. If you get a second card, I'd do it at the same time but leave the balance at zero. There is a lot of time between now and January.  I wish it was a year out and not 7 months but oh well. I think you will still get a net gain in your mortgage scores. Ignore what happens with the other FICO scores because they don't matter. 

Take the higher rate to generate a big enough lender credit to cover the closing costs. Then in a year when your FICO goes up, refi and get the lower interest rate. You won't need to open any more credit cards for the refi. Just leave a small balance on the first credit card. 

Payoff the auto loan to 10 months remaining or less if the DTI is hurting your loan pricing.

[Anonymous]

The loan was quoted with some points (I think) the loan lady has been less than helpful.  It is through Pulte Mortgage.  

rate quote was 3.625% but also says 1.25% points?  Anyone know what that means?

how many points do I need to gain to get a lower rate?  

i think it's too late to shop mortgage without taking another hit to my score.  

my DTI is good at around 26% with the new mortgage.  

[Harvey26]

@Anonymous  I would not apply for a credit card unless directed by your loan officer but what you can do is see if you have a TRUSTHWORTHY family memeber who has excellent credit and maybe has an older credit card that you can be added to as an authorized user to boost your scores I would say mom dad or grandparents and see if you can be added to maybe 2 or 3 this will also help after closing when you want to get your new cards and points is money you pay to buy down the rate thats not too bad but I would look around elsewhere I am sure you could find the same rate with less points have you check with your bank or local credit union?