Mortgage lenders asking you to close cards: urban legend?

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kcm7
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Postby kcm7 » Mon May 12, 2014 9:56 am

Wow! I just checked back on this post. Thanks so much for all your responses. I also found a couple other threads on here, where people were saying they were asked to close cards. I guess it just depends -- and hopefully I won't be asked to sacrifice any of my cards.
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-Capital One Quicksilver
-Barclaycard Arrival (no AF)
- US Bank (no rewards)
-IHG


MemberSince99
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Postby MemberSince99 » Mon May 12, 2014 12:28 pm

I'm meeting with a LO this Friday. At first my feeling was if they ask me to close cards to tell them to forget it.


But on further thought, I'd give up my Amex revolver, Citi and Discover, though reluctantly on Discover as I'd rather keep it.


The rest currently are not open for debate. Oh if it made them feel better I'd move the limit from the CSP to the Freedom and close that too. I can't see why it would matter but what do I know.


Beyond that I'm just not open at the moment. Some days I feel like just closing all of them but Associated but that would be crazy even though it would make my life easier. But some days, it's like wow would my life be easier just dealing with one card for everything. Some people do that. I'm not ready to be one of them yet but I do see the attraction.

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kcm7
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Postby kcm7 » Mon May 12, 2014 1:15 pm

Yeah, I do fondly remember the days when I had just one credit card. Things were simpler then, and I probably do spend too much time fretting over maximizing rewards/deciding what card to get next, when I'd probably be happier just drinking tea and reading a good book. But once you get the high of a free flight or a bunch of cash back or whatever, it makes it hard to go back. I think, if I closed all my cards but one, I'd feel a pang of regret every time I swiped it, knowing that I wasn't getting a little something back.
Cards:

-Capital One Quicksilver
-Barclaycard Arrival (no AF)
- US Bank (no rewards)
-IHG

badger83
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Re: Mortgage lenders asking you to close cards: urban legend?

Postby badger83 » Wed Oct 26, 2016 10:05 am

I hope it's OK to resurrect an old thread for this, but I was wondering about the flip side of this question: Is it OK to close a card you don't want anymore before closing on a mortgage? If some lenders ASK people to do it, I wouldn't think it would be a big deal. And my utilization is low, so it wouldn't mess with my ratio if I cancelled a card to avoid an annual fee. But do lenders freak out if you cancel a card after pre-approval? Should I just follow the common advice of, "Don't touch ANYTHING credit wise until you have the keys"?

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Vattené
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Re: Mortgage lenders asking you to close cards: urban legend?

Postby Vattené » Wed Oct 26, 2016 4:00 pm

I'd lean towards not touching anything while you're between pre-approval and closing just to be safe. If this was before getting pre-approved I wouldn't worry about closing an account, and if it didn't cost you anything I'd say just wait until you've closed on the mortgage to close any credit card accounts, but I understand wanting to avoid an annual fee and only having this window to do that.

I'd ask your mortgage officer. I could see them saying it's no big deal at all (it's not like opening an account where you're showing more credit-seeking activity), but I'd want to get it directly from them beforehand that it absolutely won't hurt you just so you know for sure.
-Vattené
FICO-8:
EX - 809 (11/16) | TU - 803 (11/16)
Primary Cards:
American Express EveryDay - $20,000 (10/14)
Discover it - $23,000 (2/14)
AU on Barclay Sallie Mae - $10,000 (8/15)
plus several store accounts of varying usefulness now

Tubpbs
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Re: Mortgage lenders asking you to close cards: urban legend?

Postby Tubpbs » Wed Oct 26, 2016 6:33 pm

badger83 wrote:I hope it's OK to resurrect an old thread for this, but I was wondering about the flip side of this question: Is it OK to close a card you don't want anymore before closing on a mortgage? If some lenders ASK people to do it, I wouldn't think it would be a big deal. And my utilization is low, so it wouldn't mess with my ratio if I cancelled a card to avoid an annual fee. But do lenders freak out if you cancel a card after pre-approval? Should I just follow the common advice of, "Don't touch ANYTHING credit wise until you have the keys"?


I don't know but I wouldn't touch anything. The most the annual fee could be is $450 (which is real money) but is not worth not getting a mortgage or getting a worse interest rate.
Amex - BCP, Platinum, Business Gold
BoA - BankAmericard Cash Rewards
Chase - Freedom, CSP, RC, Ink Plus
Citi - DC, Prestige
Discover - It

TXviking
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Re:

Postby TXviking » Sat Nov 26, 2016 9:31 am

mrow wrote:Should be <sarcasm>fun</sarcasm> to see how it all goes down in 3 years or so when we apply for a mortgage overseas in the Bahamas for our vacation home. Anyone here actually have experience getting a mortgage overseas while still a US citizen? We'll probably apply through Scotiabank, a Canadian bank that is big down there, so hopefully it won't be too bad.


I have experience going the other way, applying for credit (and mortgages) in the US while not a US citizen.

I have had some banks refuse me credit due to my citizenship status (Bank of America in the late 1990s comes to mind, after six months on a secured credit card they wouldn't live up to their end of the bargain and give me a secured one due to that,) but it is rare.

More commonly, banks care about requirements unrelated to citizenship. In the US, those would be things like having an SSN and associated credit file, showing proof of (legal) employment to document income, and for a mortgage, they'll want proof that you're here on a long-term/permanent visa rather than just a tourist visa (although here in Florida, it's not unheard of for Canadians or Europeans in tourist status to get mortgages for a vacation home.)

I would imagine the Bahamas is similar; although ScotiaBank and other Bahamian lenders no doubt deal with expats all the time, they'll want to see proof of income, legal status in the Bahamas etc. It may not be a bad idea to contact them NOW so they can help you figure out what they'll want when you're ready to apply.



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