Q&A: Will it hurt my credit on my preapproved home mortgage if I apply for a consolidation for my credit cards?

2 Comments

1. norm January 2, 2013

   That is a good question. I thought I could answer it but I am not sure. It will show as a new loan and you will have the same amount of available credit on your cards as you had before so you are increasing your available credit. My personal opinion is it could hurt you.

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2. Serenity January 2, 2013

   This depends on a number of factors. First your pre-approval was determined on the state of your credit report at this time. You approval depends on your debt/income ratio and your credit history. It takes into account how many cards you currently have an obligation to repay. Often creditors like to see you having cards and how well you handle them, but too many obligations could scare them off. If you are simple consolidating into one loan, without adding to your overall debt to income ratio, then I see no reason this should harm you. If you are considering taking out more credit, then it would hurt you.

   However, if you could wait until escrowww closes, I think this would be a safer option. Usually it takes 30 days to close escro on a home purchase. I would get out there and find the house I wanted and close escro, then consolidate cards and other debt into one loan. I think it would also be easier to do so when you have purchased a home. It is always in your best interest credit wise to own rather than rent. When you own you are creating more assets in the form of equity. Lenders like to see your overall financial state and building equity is rather like money in the bank.

   I suggest you seek out a financial adviser, pay the fee for a professional opinion and not rely on what is written here.

   I wish you all the best life has to offer.

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