Mortgage

For just about anything you want to get off your chest about credit cards.
9 posts
MikeD
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Mortgage

Postby MikeD » Mon Mar 17, 2014 10:13 pm

I plan to apply for a Home Mortgage in early 2015. If I open a new credit card today, will this cause any difficulties for me to get approved? My EQ FICO Score is 725.


Cards:

AMEX PRG (No Limit)
AMEX Delta Skymiles (10k)
Credit Union Platinum Visa (15k)
Credit Union MC (5k)
Capital One (1,250)
Cards:

AMEX PRG (No Limit)
AMEX Gold Delta Skymiles (26k)
Credit Union Platinum Visa (15k)
Credit Union MC (5k)
Capital One Quicksilver (4,750)


haikuginger
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Postby haikuginger » Tue Mar 18, 2014 9:40 am

If it's less than 12 months away, then the inquiry might not drop off your report before then. With the limits you've got on your current accounts, I'd just garden until then. A couple months before, start paying most of your balance before the statement cuts to get your reported UTIL to around 5%.

irvinfitness
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Postby irvinfitness » Tue Mar 18, 2014 11:40 am

I'm pretty sure it won't matter that far out....I thought it was 2 months that really mattered/counted against you, but i could be wrong.
[size=60]Chase Freedom Signature - 10k (rotating 5%)
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Chase IHG Rewards (Priority Club) - 18k (Annual Night Certificate, Platinum Elite Status)

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linuxmachine
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Postby linuxmachine » Tue Mar 18, 2014 12:12 pm

I don't know how the landscape has changed for mortgages since I got mine a few years ago, but ideally you want 750+ score for the best rates/options on your mortgage. I'd say don't do anything at all and try to improve your score as much as you can, unless the bar has been lowered that is.

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djrez4
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Postby djrez4 » Tue Mar 18, 2014 12:44 pm

MikeD wrote: My EQ FICO Score is 725.


^ ^ Here's your main issue. ^ ^

If the new card pulls from EQ, your score may drop below 720, which is one of the cutoffs for higher mortgage rates. All three scores above 720 are good. Any one score below 720 and you pay at least 1/8 of a point higher. It might not seem like much, but that can cost you $1,000s over the life of the loan.

If you don't know your other scores, find out. Mortgage check all three CRAs, so all three scores matter.

Also, you don't mention utilization at all. I suspect, with a 725, that you either have an old delinquency or higher utilization. If you have higher utilization right now and you pay it down, you can improve your scores to the point where an inquiry won't matter.
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MikeD
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Postby MikeD » Tue Mar 18, 2014 10:14 pm

Thanks guys for all of your input. To answer the question you asked. First, my utilization across all my cards is less than 2%. I charge everything to my AMEX cards for the points, but pay them down before they report. Second, my EQ "FICO" score is 725 with no delinquent accounts. I believe the reason for my FICO score being somewhat low is the average age on my accounts being 4.5 years. The only reason I want a new card is for the 5% Cash back offer on Chase. However I don't want to hurt my chances on a mortgage in early 2015.
Cards:

AMEX PRG (No Limit)
AMEX Gold Delta Skymiles (26k)
Credit Union Platinum Visa (15k)
Credit Union MC (5k)
Capital One Quicksilver (4,750)

JoDa
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Postby JoDa » Wed Mar 19, 2014 10:23 pm

Given your short AAoA and what a new account could do to that, I'd say don't do it. Your utilization is fine, good even, so you don't need the extra credit to improve that, and that short AAoA is probably your biggest downfall. If you had a longer history, I'd say (with much mortgage experience under my belt) that it doesn't matter this far out, but given your particulars I'd hold off. Just app for it once you get that house.
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thom02099
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Postby thom02099 » Thu Mar 20, 2014 9:50 am

Unless things have changed in the mortgage industry fairly recently, all three reports are pulled and the median score is the score that is used to determine what sort of terms you get. That could be EQ...or not.

Conventional/anecdotal wisdom on mortgage applications is to not apply for ANY new credit at least 6 months out from applying for a mortgage. Some mortgage lenders/brokers may require that, if you have credit cards, all the balances must be zero.

When in doubt talk to your mortgage broker about their requirements; knowing ahead of time can reduce problems with the unforeseen.
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whit
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Postby whit » Thu Mar 20, 2014 2:55 pm

2nd that

some mortgage reps will actually tell you to open a cc to help improve your credit/establish some sort of credit if little to none

some may tell you to close some cc

ask yourself, will opening a card improve my score by the time I do the mortgage or, will it lower it?

the higher the better in terms of overall getting a low rate right?



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