“The Effect of Large Credit Card Charges”
Hi Joe,
Hope all is well! We wanted to touch base with you to obtain some guidance.
We have been planning on purchasing a new bed for before we get married
and plan to spend around $2,000. Now that we have a pre-qualification,
we want to be sure to make the right moves financially. Will this type
of purchase affect the pre-qualification and should we wait until we can
pay cash for the bed? Is it better to put the purchase on an existing
credit card and make payments accordingly or could we open a new credit
card from the place of purchase if there is a “no interest for x amount
of time”
Thank you so much for all of your help!
Tricia
We give all clients very clear instructions about not making large charges
on credit cards once a mortgage application is in process. When credit
card debts increase, the monthly payment increases which can change debt
ratios. If the ratios are already “tight”, even a slight increase can
be a problem.
Fortunately for these folks they are wise enough to ask the question and in this
case, this kind of charge literally has very little effect on their debt
ratio.
The best advice if someone isn’t sure, always ask your mortgage professional.
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