Applying for Credit During the Loan Process could Wreck Your Opportunity for a Mortgage

Applying for Credit During the Loan Process could Wreck Your Opportunity for a Mortgage The Action: The consumer applies for additional types of credit while they’re in the process of seeking final approval. Why It’s an Issue: Undisclosed debt could critically change any dynamic of the loan, and more importantly, could cause your loan to be denied. If your mortgage loan has not closed, taking out additional debt — even a credit card with a tiny limit — could change your credit score, which is material to your ability to qualify for the home mortgage. In addition, any associated debt with that balance, such as a monthly car payment, could easily drive up your debt-to-income ratio and jeopardize your loan approval. Knowing ahead of time what not to do can make all the difference. Knowledge is Power and Credit is King!