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New cards before a mortgage app?

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Moderator Emeritus

Re: New cards before a mortgage app?

Probably a non-issue for the typical mortgage products; 4 months inquiries for a letter of explanation are standard.

 

Remember lenders when we're talking conventional mortgages aren't going to worry about anything the GSE's won't, they want to originate, bundle, and then sell that paper.  FHA similar, if FHA doesn't really care, lenders don't.

 

If you're chasing a jumbo loan though, YMMV greatly and I'd seriously consider curbing my SUB enthusiasm in the months leading up to a mortgage app.




        
Message 11 of 13
Super Contributor

Re: New cards before a mortgage app?

Great point about jumbo loans.  My home will cost under that limit and so will be a conventional loan.

 

It sounds like one new card every 122-180 days will be a decent rhythm.  If I am understanding you right the worst I should expect is having to fill out a letter of explanation on one card (card opened in the last 120 days).

Message 12 of 13
Moderator Emeritus

Re: New cards before a mortgage app?


@CreditGuyInDixie wrote:

Great point about jumbo loans.  My home will cost under that limit and so will be a conventional loan.

 

It sounds like one new card every 122-180 days will be a decent rhythm.  If I am understanding you right the worst I should expect is having to fill out a letter of explanation on one card (card opened in the last 120 days).


The letter is actually on inquiries, rather than tradelines but yeah.  You will need to note if the inquiry lead to a tradeline IIRC, but you could probably be non-trivially more aggressive than that and still be OK TBH.   

 

I mean let's keep it in perspective, I had to write LOE's for a tax lien and a gap in employment... inquiries ain't that big of a thing, really it's a sanity check against debts that haven't shown up on the credit report yet: credit cards are way different than personal loans or similar that meaningfully change your DTI.  I suspect worst case is they ask you for a CC statement, which should be no big deal but anything the UW sees that is abnormal is something that can delay your file; personally delaying a signup bonus in the 4 months leading up to a mortgage doesn't seem like it's a big deal and I would suggest planning your mortgage rather than rolling out of bed one day and deciding to move bud Smiley Happy.

 

That said, it really shouldn't be a big deal, doesn't even look like I saved mine but I remember having to explain 3-4 per bureau though several of those were mortgage shopping, but just have a slightly better story than "chasing sign up bonus" for why you picked up the credit card would be my suggestion Smiley Happy.




        
Message 13 of 13
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