Credit Score in El Paso>Question Details

Michael Bulz…, Renter in Houston, TX

What effect will taking out a home mortgage have on my credit score?

Asked by Michael Bulzomi, Houston, TX Wed Apr 13, 2011

I have a very good credit score (in the range of 780-800). Its taken me quite some time and thousands upon thousands of dollars of paid off credit card debt to get here. Will my new home mortgage drastically impact my credit score?

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Thanks all! I have a great realtor and mortgage broker and wanted to get some more feedback on this issue. I know that my mortgage application will knock a few points off every time my credit is run (after 3 times) my question was more geared towards AFTER I am awarded the loan, what will happen to my credit. I have plenty of available credit, upwards of $50,000 in unused credit, and I want to keep it that way.

This question relates to a very important fact that many new homebuyers ignore....or don’t think to consider:

see my blog post and comment with your tips for first time home buyers!

0 votes Thank Flag Link Thu Apr 14, 2011
Hello Michael,

The initial effect would be minimal and it would then be quickly be reversed in a couple of months assuming you are making the payments on time. You can have credit scores in the 800's with credit card debt as well. It's important to keep it at or below 40% of your available credit. Having no credit card debt is the best way and I applaud your efforts to pay off your debts.

Go buy your new home and keep on doing what you are doing and don't worry. Good job!

Don Groff
REALTOR | Mortgage Broker | Consultant
Buy - Sell - Lease - Invest
Keller Williams Realty | 360 Lending Group
o.512.669.5599 m.512.633.4157
0 votes Thank Flag Link Thu Apr 14, 2011
Hi Micheal,
Your credit will be affected very slightly to begin with but will soon be back to normal. Do you have a good mortgage broker? If not I can put you in touch with one. If you need any help please don't hesitate to contact me.
0 votes Thank Flag Link Thu Apr 14, 2011
Please talk with a lender about the effects. It is widely (a mortgage) a good debt by many, including financial consultants.
0 votes Thank Flag Link Thu Apr 14, 2011
Congratulations on getting your score in good shape. Generally any score in the 700 plus range is excellent and you'll obtain credit very easily. 740 will give you the best rates and terms from most lenders.
First, your score is great and will remain great even if you apply for a mortgage. Don't be a score watcher, worrying about minor fluctuations, as I said anything above 740 will get you most of what you want.
When you apply for a mortgage, your score will drop about 3 points per inquiry. When you are approved and close you should stay in solid ground and with mortgage history you'll be great.
Keep paying your bills on time, keep balances low and minimize unnecessary credit inquiries from department stores or auto dealers.
0 votes Thank Flag Link Wed Apr 13, 2011
Hi Michael,

It is possible that your credit score will initially drop from the time your Lenders start pulling your credit for the mortgage app. Your FICO could stay below your current score for some months until you show that you are paying your mortgage ontime. Please remember your credit score is about risk to lend and pay back debt and the more debt that you have the more risky you are even if the debt is a home mortgage.
Web Reference:
0 votes Thank Flag Link Wed Apr 13, 2011
Hi Michael,

There is no doubt opening a mortgage account on your credit will affect it, most likely it will help but only time will tell after making a few months of payments. Most people spend their lives working on building a credit score like yours to make big purchases such as a home. Hopefully all that hard work gets you what you deserve!

Good Luck!
Web Reference:
0 votes Thank Flag Link Wed Apr 13, 2011
Howdy Michael
your questions about buying a house are so great. You should write a book about all these questions, answers and then your findings or at a minimum blog them. Your credit improves with a mortgage, of course assuming with such a great credit score you pay everything on time. Not only the credit score improves and shows ability to repay and roots for you, the purchase of a home yields great mental, physical, spiritual and financial rewards. Throughout history it is solidly one the largest and best purchases you will make. So Michael, when are we going to get together to look at houses. Give me a call.

See El Paso Homes for Sale on your cell Text EPT to 87778
What is my home worth, or any El Paso Home worth, how long has it been on the market and more www.
Wishes for God’s best to you and yours in every way each and every day!
Cynthia Ann Morris,
CNE, CRS ,CSP,ePRO, GRI, TAHS,Texas Property Tax Arbitrator,Certified Real Estate Instructor
Sales, Property Management and Investing First Time Home Buyer Specialist
Short Sales and Foreclosure WE BUY HOMES
Broker-Owner Serving you and all of El Paso County.
Phone 915 471 4300 Fax 915 855 4609
email Website
I want to be the only REALTOR ® you will ever need
Technology will NEVER replace real estate professionals, but real estate professionals with technology WILL
Web Reference:
0 votes Thank Flag Link Wed Apr 13, 2011
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