Any travel hackers out there have any experience working with loan officers and answering the obvious questions like why do you have so many credit card? I am only about 6 cards deep into my journey but would like to purchase a 2nd or 3rd rental property later this year. Thanks for any personal insight somebody can give.
I’m not into travel hacking at all, but unless you carry balances on your credit cards I can’t imagine it being much of a topic. And if it is, I would imagine a somewhat honest response akin to saying that you have different credit cards to be able to take advantage of the different promotional offers they bring would be a perfectly acceptable response.
I ran into a little trouble 4 years ago. I was rejected for a mortgage based on some qualities of the Condo, not my finances. Anyway, in the aftermath, I gave up. Then I found travel hacking, and we added 3 cards for me and 3 cards for my my wife. Then a more expensive townhouse came along, and we applied for a loan with a different mortgage company. Apparently, some of the banks were scrambling account numbers that they reported to the credit bureaus to protect privacy? The mortgage company was concerned with the massive new credit lines that were opened, even though they all had zero balance. (I had already cleared the bonuses.) They kept trying to match the accounts with the cards I told them I had opened, and they all had the same application date, so we could not determine which account was which.
Eventually, I wrote a letter to the bank and randomly matched the accounts. I could have been correct? I explained I had no intention in using my credit, and explained that we had opened the 6 accounts to earn 250,000 travel points. The tone of the letter was kind of frustrated and annoyed. After sending it, I thought I might have made a mistake. Shortly after the letter was sent, they approved the loan on my vacation home in Myrtle Beach. The loan went through. Loan application to closing took about 45 days.
I just recently got pre-approved for a mortgage loan amount.
Didn’t get any questions on why I had 25 inquiries and it went fairly smoothly. Now to just look at houses and decide which one I’d like.
I have heard if you are trying to buy a house you should hold off or reduce the credit inquiries/recent credit card accounts… I don’t have first hand experience. I have quite a few credit cards for travel hacking and was able to purchase a house without a problem. My guess would be that it depends on LTV, credit and the like. ===Good luck!
I refinanced last October. They didn’t so much as ask. I churn about five cards a year and am in my fifth year of doing so. Just don’t open one in the month before the mortgage app.
Hi, I’m not a travel hacker but in my experience most banks/financial institutions only consider the credit cards from a liabilities perspective, and even then only to assess your ability to service the loan.
Some people make the mistake of thinking because I have significant equity in a property I’ll use this to fund additional purchases. That’s great from a deposit and security point of view but not from a serviceability perspective.
If your credit card liabilities do not significantly impact your serviceability then you should be ok. Just keep in mind that even if you pay off the full amount each month the bank will take into account your full credit limit for calculation purposes e.g $5,000 credit limit with nothing owing and paid in full each month, the bank will still assume $5,000 in liabilities.
This is assuming you disclose all of your liabilities in your loan application.