Skip to Content

I can’t use my credit cards after I go under contract to buy a home

I can’t use my credit cards? It’s important to note that once you go under contract to buy a home, you should freeze.

Don’t change jobs

Don’t do anything. If you’re going to consider changing a job, that’s not great timing. We can talk about it.

Don’t spend a lot of money – I can’t use my credit cards?

But more importantly, I’ve had people where they figure once they’re under contract, they can do whatever. We’ve already pulled their credit report and we’re not going to see anything, so maybe they go buy a new car. Or I had somebody who ran up quite a big bill buying a bunch of new furniture prior to closing. They wanted it ready right as they went to closing. So they could have the new furniture to move in right away.

And the problem with that is that we’re required by the various governmental agencies that write the mortgage guidelines; Fannie Mae, Freddie Mac, FHA, VA, to check right before closing. And we do a soft pull credit report to see if you’ve got any new credit on your credit report. And if there’s activity like increased credit balances or a new car loan, or new anything, we’d have to go back and build those numbers into your debt ratios. And that can cause a big problem.

A true story

The, the client that ran up $30,000 in new furniture, that was a problem. And we had to delay settlement and find a solution to get that debt off his credit report to keep his debt ratios where they were because they were already maxed out to the limit. He really should not have gone out and bought anything between contract and closing.


So just an important note, once you go to contract on a new home, just try not to do anything big. You can certainly go out to dinner on your credit card. Even if put a you new washer-dryer on there for $1,500 or $2,000. But don’t do anything big. Preferably do nothing, but you can certainly use your credit as you normally would. Just don’t do anything that’s outside of normal and becomes a really big expense. Because somebody’s going to question you on it at some point. So please remember that when you go to buy a new home.

Contact me to discuss your credit, mortgage rates, or other mortgage questions. Click here to schedule a call or you can email me directly.