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Dervrak

When is it "safe" to apply for credit during the mortgage process?

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I am purchasing a house and plan to do some renovations as soon after closing as possible. However, my realtor advised me not to apply for any loans or other credit during the process as it could impact my credit profile and give the bank an excuse to break my rate lock (got a sweet rate lock before the latest rate increase in December).

 

Closing is within two weeks, I've already received final approval and received all my final closing documentation.

 

I would like to go ahead and get the contractors set up and ready to go so they can hit the ground running as soon after closing as possible. I've already got the carpet installers set up, but I paid the deposit out of pocket, I also plan to have a full paint job and some trim work done.

 

So is it "safe" at his point to apply for other credit/loans, I've gotten some no interest offers I would like to take advantage of. Or is there a chance the bank could pull my credit again sometime before closing?

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You may cause a delay because the underwriter may require a letter that explains any new inquiries that are discovered when they pull your credit again at the end.  The delay could be a few hours, a few days, or... who knows.

 

Any new payment obligations need to be disclosed and will impact your DTI, which doesn't matter unless you've already committed to buying too much house.

 

It's generally not an enormous risk if you're well qualified for the mortgage, but it is almost always an unnecessary risk.

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Thanks for all the replies!

 

Just some follow up. The situation kind of resolved itself. The seller requested that closing be moved up a week to this Thursday, Jan 17th from Jan 24  (guess they needed the funds to close on a new house and didn't want to live in a hotel for a week) and surprisingly my bank obliged.  Also, I explained the situation with the painters and carpenters and they said they would go ahead and schedule the work and I could pay them the deposit after closing.

 

I flat out asked the loan officer at the bank if their underwriters ran another credit check the day of closing (now bear in mind this is a small regional bank, not one of the large national mortgage companies, so their procedures might be a little more lax), he said he had never heard of such a thing and said once the underwriters released their "final approval" and the closing documents, they were out of the process entirely and had never had an issue pop up with after the final approval and closing documents were released in his 18 years at the bank. (though he had a few people back out at the last minute).  He also said that it wouldn't have mattered in my case anyway because I was nowhere near "borderline" (paying over 30% down, high credit score, great debt to income ratio).  

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