Keep your credit score high before applying for a mortgage, Wilmette, Winnetka North shore chicago home buyer

Don’t go on a spending spree using credit if you are thinking about buying a home, or in the process of buying a new home. Your mortgage pre-approval is subject to a final evaluation of your financial situation.

Every $100 you pay per month on a credit payment could cost you about $10,000 in home eligibility. For example, a car payment of $300/month could mean that you qualify for $30,000 less in a mortgage. Even if you have accumulated enough savings for the 20% down payment, you should consider not making any large purchases until after closing. The last thing you want is to know that you could have purchased a new home had you curbed the urge to spend.

Also to keep your credit score as high as possible, refrain from opening any new credit cards, store cards or applying for credit for at least  6 months before purchasing a home.  Applying for credit usually involves a 'pulling of your credit'.  Lenders will pull your credit when you apply for the new line.  This may be a soft pull, which should not impact your score, but it can lower it in some situations, or a hard pull, which will likely lower your score especially if several lines of credit are applied for in within a few weeks time.    So say "NO" at the store when the cashier offer you 20% off of your purchase if you open the score card.


The best mortgage rates are only offered to home buyers with the best credit.  Lower credit scores can prevent lenders from offering you their best rates and cost you thousands, perhaps even hundreds of thousands of dollars over the term of your mortgage. 

Keep your eye on the prize and get the best rate you can - You can go out and buy that new car or open that new card AFTER you close on the house.