- Centurion Member
- Posts: 1468
- Joined: Tue Jul 31, 2012 12:20 pm
- Location: United States
I was at 701 EQ, 710 EX and 720 TU when we applied for the mortgage. My scores cost me about 1/8 of a point. 720s across the board would have kicked me up into the highest bracket. I think you can get there if you pay down your balances. A new inquiry can have a small effect on score, but not enough that you'd be under 720 once those balances are paid.
They were concerned with repayment ability - whether the monthly payments on my cards would eat up enough of my income to make it difficult to pay the mortgage. Because I generally don't let balances report, my monthly payments showed $0. They didn't care about my many cards. On the other hand, my wife had a small balance on one of her cards that reported a minimum monthly payment of $25 or so. The bank requested that she pay off the card and close it. Does it make sense that they don't care that I have available credit that could, theoretically, eat up my annual salary but they want my wife to close a card with a $10k limit? Not on Planet Logic. But, that's how the metric works. If you have a minimum payment reporting, it counts against your repayment ability. If you have $0 balances across the board, even if you have a stupid amount of credit available, it counts for nothing.
I had to complete a form explaining my inquiries, but they didn't really care one way or another whether I had them (I had 4 inquiries within 6 months and 16 within 12). The form listed each inquiry; I wrote things like "personal credit account" or "auto loan" in the space provided and never heard peep.
All that said, it sounds like you're going to finance construction of the home with a loan. That generally takes a construction loan which carries a higher interest rate and, I presume, different credit qualifications. Once the home is constructed, you refinance with a conventional mortgage at a lower rate. I'm not personally familiar with the process, so everything I've said, above, should be taken with a grain of salt. Your experience may be completely different. However, a good loan broker will be able to show you the best options for your financial and credit situation and help guide your choices.
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