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

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I have been pre-approved for a home loan. I have not found a house yet. I want to consolidate my credit card and personal loans into one loan. I didn’t want to exonerate my home loan approval.

  1. Reply
    May 3, 2011 at 3:29 am

    no it will not

  2. Reply
    May 3, 2011 at 4:27 am

    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.

  3. Reply
    May 3, 2011 at 4:48 am

    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.

  4. Reply
    May 3, 2011 at 5:48 am

    Debt consolidation TRASHES your credit report. When you consolidate your debt, banks (i.e., lenders) look at that as a bankruptcy. Debt consolidation is nothing more than a “con” because you think you’ve done something about the debt problem. The debt is still there, as are the habits that caused it – you just moved it! You can’t borrow your way out of debt. You can’t get out of a hole by digging out the bottom. True debt help is not quick or easy.

    Larry Burkett, noted financial author, says debt is not the problem; it is the symptom. I feel debt is the symptom of overspending and undersaving. Our certified counselors will not recommend debt consolidation for a client. The reason that we do not use debt consolidation is because it doesn’t work.

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