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MONEY
I Want to Apply for a Mortgage in a Few Months — Should I Accept That Sexy Credit Card Offer?
That depends on a few things
A friend recently posed an interesting question. He got an enticing offer for a new credit card with a big sign-up bonus. But he plans to start shopping for his first house in a few months. His query: Will the credit card mess up his ability to qualify for a mortgage?
It’s a savvy question, and before answering I asked a couple follow-up questions.
What’s your credit score?
There are a couple of important thresholds, such as 620 (the minimum for some Federal Housing Administration, or FHA, and Veterans Affairs, or VA, loans) or 700 (a cutoff for conventional mortgages). If you’re right on the cusp, probably better not to mess with your credit. On the other hand, if you’re well above those thresholds — and if you’re getting sign-up bonus offers, you probably are — then it’s safe to apply for a new card.
How much spending is required to get the sign-up bonus? You don’t want to be forced to spend more than you can afford just to cash in the reward, especially when you’re saving up for a major purchase.
