December 2, 2021

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FHA Home Loans And Your Holiday Debt

FHA Home Loans And Your Holiday Debt

Are you considering an FHA home loan in 2019? Even as shoppers nationwide are preparing for Black Friday, the biggest shopping day of the year, some are being tempted by credit card offers to help pay for the gift-giving in December.

But if you need a home loan in 2019, Christmas shopping season should be more carefully thought out for several reasons.

It’s generally advised not to open new lines of credit in the planning stages leading up to your FHA loan application. Whether you need to refinance a home loan, get a new mortgage for your dream home, or apply for fund to repair your property using an FHA 203(k) Rehabilitation loan, you will need to maintain and pay down your existing lines of credit and avoid opening new ones.

What Does It Mean To Open New Lines Of Credit Ahead Of Your FHA Home Loan Application?

When you apply for new credit, you get a hard inquiry on your credit report, which can lower your score. Even if you think the lowered score isn’t reduced by much, those who are worried that they may not financially qualify with their FICO scres should take note.

The other problem with opening new lines of credit ahead of your mortgage loan application? The fact that you have more debt and more potential debt, which the lender is required to take note of when deciding whether to approve or deny the mortgage loan.

Not All Credit Cards Are Created Equally

If you do a bit of online research into how credit card applications may affect your credit rating and your ability to qualify for major credit lines later, you’ll find some discussion of how certain kinds of credit cards are viewed as more of a risk or a liability than others. Store credit cards, for example, have a bad reputation in this respect.

Some consider store cards to be the worst kind of credit, and that’s worth thinking hard about over the holiday season when the offers are plentiful and the discounts for applying for the card can be impressive.

If you are prepping for an FHA mortgage in 2019, you should avoid the temptation to apply for those store credit card accounts for this reason. Scientific or not, it’s definitely worth researching further so that you understand what is on the minds of those in the lending industry on such issues.

Avoid Increasing Your Debt Ratio

Holiday time is financially stressful and there are very good reasons to moderate spending during the winter season. Applying for a home loan is a special circumstance that requires consumers to treat their finances very differently in some cases; future home owners should make arrangements to avoid letting the holiday season complicate plans to purchase a home in the new year.

It’s never a bad idea for those who are worried about their ability to financially qualify for a mortgage to discuss their concerns with a housing counselor. You can get a referral to a HUD-approved housing counselor in your local area by calling the FHA/HUD at their toll-free number, 1-800 CALL FHA.

Joe Wallace - Staff Writer

By Joe Wallace

November 21, 2018

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for for (8) years and is currently the Associate Editor for

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About was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

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