Posted by William Charles on August 3, 2017
Recaps

Published on August 3rd, 2017 | by William Charles

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Recap: Mortgage Approval After 66 New Credit Cards, eBay Tips & More

 



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joE
joE

“Mortgage Approval After 66 New Credit Cards in 3 Years”

very interesting, a must read for everyone so it can benefit either you or someone you can educate before purchasing a home.

Geo
Geo

I appreciate your comment. Thanks for reading!

chaseaholic
chaseaholic

Great story Geo (also thanks for the site!)

Could you provide more info, I was trying to see how good 4.125% is – how much down, how much house was, and IIRC it was 30 yr fixed?

I was checking bankrate – looks like the best for my area was ~3.875-4.04 with 740+ FICO, 20% down $1M house but that was just from googling around for a bit.

Geo
Geo

Thanks for the comment!

PM me on r/churning @ OSUmountaineer and I can share additional details.

Geo

Peter
Peter

I didn’t read every word, but judging from the section titles, this is a good guide.

Having recently gone through both re-finance and HELOC approval while having to explain a ton of inquiries on both my credit report and my wife’s (needing to submit quite a few cc statements too to prove what was going on), I agree that the process isn’t as prohibitive as it may seem at first.

However, I would still recommend anyone buying home for the first time (where mortgage approval is crucial) to lay off on the cc gaming for 6+ months. I had a suppressed credit score of ~740 due to a bunch of new accounts, and when I asked the bank it supposedly cost me a 1% interest rate on the HELOC compared to if I had a score of 800. Now I didn’t care about HELOC much, but if gaming the ccs added even 0.5% to my mortgage, it would’ve been way more expensive than the cc rewards are worth.

Kaden
Kaden

I heard the same thing about the credit score being above 740 for the best rate from our mortgage guy as well. So, I’d assume that as long as you’re above that 740 you’re looking good.

HoustonRobert
HoustonRobert

The above data points are true regarding the mortgage, as I am at 22/24 (with a recent auto purchase, too) and recently refinanced an investment property. The underwriter asked me to write a letter to explain the inquiries but because my score is 780+, I had no problem obtaining the best rate for my loan.

Francesco
Francesco

It would be interesting what argument(s) you used to explain the inquiries in that letter, but if that’s too private to share here I totally understand.

HoustonRobert
HoustonRobert

I was honest and explained the inquiries were to obtain sign-up bonuses, figuring there would be no point in trying to say I wanted to “keep my expenses separated”. The underwriter never asked for further explanation, as she had likely seen other such cases.

Francesco
Francesco

Thanks for the info! I also think honesty pays off well in general, and it’s good to know that mentioning signup bonuses didn’t cause you any unnecessary trouble in this case.

Michael M.
Michael M.

Cooling off on the hard pulls for 4 months seems like great advice, but my biggest concern (if I were looking to get a mortgage in the next few months) would be the MS’ing and activity on multiple bank accounts. Even though I isolate my MO deposits to one account (so I could conveniently ignore that account when providing my info), I don’t always use that account to pay down related CC bills, which means eventually transferring that money to another checking account or online savings account. I guess I’d want to think that through a little more if I was purchasing a home in the near future.

Right now, between my wife and me, we have about 6-7 bank accounts that all have a decent amount of varying activity, along with another 8-10 or so “dormant accounts” that are open but not really used for much activity (mainly M&T accounts waiting to be closed).

Geo
Geo

Hi Michael,
Author of that post here. Regarding bank accounts, I was only asked to provide statements for accounts that would be used for the down-payment and closing costs. If I was transferring large amounts of MS-related money into one of the accounts I used for the downpayment, that would have been an issue.

I think your comment speaks to the necessity for degrees of separation between primary deposit accounts and “play” accounts. When I pay off a card I use to MS, I almost exclusively use bill pay directly from the account I deposit into, that way I don’t have to transfer large sums before paying.

In short – my recommendation would be to get all of your closing money into one or multiple accounts at least 90 days prior to purchasing a home. My money was spread across 3 high-interest savings accounts, but that was fine for me since those accounts have little to no activity.

Hope this helps,
Geo

PT
PT

To be safe, I would make it a full 6 months, as that is what my credit union did for equity loan. I had to explain each inquiry and new account for that time (5 or 6 cards plus some clis) but luckily I keep a detailed log and notes and explained everything. They did act surprised about the level of activity but did accept it without issues. They also said 740 or above will get best rate so that seems common. I think they take the middle FICO score among the three main bureaus.

DaWoodMan1
DaWoodMan1

Churning and mortgages is something new and dear to my heart. The more stories, guides, above about this topic, the better!

Geo
Geo

Glad you liked the post!

DaWoodMan1
DaWoodMan1

Very much so.

I use Plastiq for the same exact purpose as you but in reverse. I pay the rent via Plastiq and everyone in my household transfers the money to me. If I could get the wife into the hobby, I’d have her pay me via Plastiq as well.

Since you are responding so quickly to comments, can I ask how you set up those payments in Plastiq? I tried to pay my parents back for a loan they gave me but Plastiq wouldn’t let me pay them because they said, “Plastiq cannot be used to pay that type of debt,” or something along those lines. I’m curious how you setup the payments between you and your fiancée. The specifics would greatly help.

Geo
Geo

As rent/mortgage. She was setup on the lease as my landlord and me her sublettor. Again, we ran this by our landlord (errr, my fiances landlord) first and she loved it.

DaWoodMan1
DaWoodMan1

Thanks Geo!

Josh m
Josh m

I sent the mortgage article to my wife, she thinks we will never be able to buy a house unless I cancel like half of my cards, hopefully this will help. (I have nowhere near 66 cards fwiw)

XXX
XXX

If you don’t mind the hard inquiry you can just get a mortgage pre-approval to prove to your wife you are able to get a mortgage.

When you are closer to buying most real estate agents require a recent pre-approval before they will even work with you and you shouldn’t submit an offer on a house without one anyways.

Geo
Geo

I hope it is useful to your wife! Thanks for reading.

Geo

Deb
Deb

Congrats on the hassle free mortgage! I wasn’t doing any of this when we bought our home many years ago but we did use a buyers agent lined up through a cash back portal. It is still my largest single cash back portal transaction to date. We earned $629 in our Upromise account for buying our house.

DaWoodMan1
DaWoodMan1

Nice! Good to know that you can earn from a portal when buying a house!

m
m

what? I’m not sure how that works/how did you do that…? What company now…? Is that still possible.? And also… if ;you’re using an online portal doesn’t that mean you paid online w a credit card?

travelmom
travelmom

I’ve refinanced twice since starting this hobby 5 years ago. Never an issue, though each time I held off on applying for anything for several months before refi application. My refis were through PNC and Third Federal.

My husband and I each have around 90 accounts on our credit report that show up, either opened or closed.

Kumar
Kumar

Thanks a lot, William, for that link to Chase 10k points post. I was able to get 10k points. I wouldnt have bothered if not for this post.

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