One of the most common pieces of advice borrowers hear once they go under contract: "Don't touch your credit cards." It sounds smart, but it's not quite right, and understanding the actual rules can save you a lot of unnecessary stress during your home purchase.
Here's the real story. When your mortgage lender pulls your credit at application, that hard inquiry is valid for 120 days under agency guidelines. We don't re-pull your credit before closing. So any new charges you put on your EXISTING credit cards (groceries, gas, furniture, dinner out) don't show up on the mortgage side and don't affect your approval.
What we DO check for before closing is new debt. Right before we send docs, we run an undisclosed debt monitoring report (sometimes called a soft refresh or LQI check) that looks for:
: New credit card applications
: New auto loans or leases
: New personal loans or installment debt
: Any new tradelines that weren't on your original credit report
THOSE are the things that can derail your approval, because they change your debt-to-income ratio and can trigger a full re-underwrite.
In this video I break down:
: How the 120-day credit validity window works
: Why charging on existing cards doesn't matter
: What lenders actually check for before closing
: The specific actions to avoid from application to funding
: What to do if you accidentally opened new credit
If you're in contract right now or about to apply for a mortgage, watch this before you make any moves.
Jesse Gonzalez, President
True Blue Lending Corporation
Company NMLS #2380218 | Individual NMLS #278103
www.truebluelending.com
