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Recently closed on my mortgage. A few DP.

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Recently closed on my mortgage. A few DP.

I just recently closed on my mortgage, well about a month ago.  I have a few DP from my experience. And keep in mind that each case is unique and what has worked for me doesn't mean for you it will.

 

1.  My wife's mortgage middle score was about 620.  Mine was 680.  After the initial pre-approved.  I "foolishly" applied for a new card for my wife.  She had just 1 card and 1 personal loan on her profile with a few paid/closed collection/charged-off accounts as recent as 3 months prior to the mortgage application.  I thought that by adding another card on the file, that should boost her score up a little to about 640 to get into a higher tier and get a little better on the rate.  And it did.  Once the new card reported, her score shot up to 652.

2.  The LO didn't bat an eye when I told her my "mistake".  She said we just need to write a letter to explain the U/W why we applied for the card.

3.  The LO also said it's ok to use our credit cards for normal everyday usage.  As long as we do not increase the debt above the debt when we were pre-approved. It would be fine.  

4.  The LO did say no more new credit though, as we have a "legitimate" reason to apply for the 2nd card on my wife's profile.  There would be no other reasonable explanation for any further new credit account.

5.  We actually ended up with more debt on the closing date than when we were pre-approved for the loan.  That did not really cause an issue because the loan amount we financed was lower than the maximum we can borrow.  Maybe we were luck out and got easy going U/W lol.

6.  The loan was FHA.

 

As I said, each case is unique.  It's best to not apply for a new card and keep your debt as low as you can.  But your overall credit and financial situation may allow a few wiggle room here and there.  I do not encourage you to break from the common wisdom and do what I did and potentially could cause you to get denied for your loan.  I am just merely stating that getting a new credit card, or accumulated more debt during the process, under certain circumstances, is still ok.  



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New Member

Re: Recently closed on my mortgage. A few DP.

A similar situation also happened to us. I mistakenly took out a personal loan of $7500 for a toy. When I informed our loan officer he said he will just re-adjust the numbers. He got back to us and said everything is still very good.

 

Everyone's situation is unique, if your DTI is borderline then it is best to avoid new debt it might derail your loan.

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Moderator Emeritus

Re: Recently closed on my mortgage. A few DP.

Definately stay away from new credit especially installment loans in the years leading up to a home purchase.  Try to get any existing installments paid down to where there are less than 10 payments remaining.   people stacking up a lot of loans with monthly payments is bad because it contributes towards DTI ratios on the back end and decreases your ability to pay on the new mortgage.  


Starting Score: 08/29/2011 TU 671 EQ 674
Current Score: TU 676 EQ 676 EX 676
Filed Chapter 13 on 06/01/2017 after job loss.

Goal: FHA Construction Loan

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