I‘d cancel and chalk this up to a lesson learned. Don’t make any financial commitments until you are closed. The mortgage company can use this as an excuse to worst case deny your loan, or lesser change the terms or rate because you changed your situation.

True, you can talk to your lender and explain the situation, but there are many people along the chain of approval who may or may not be understanding. And it depends how close you are to pushing your credit limits for a mortgage (not credit card limits, that’s different ), meaning the % of your income balanced with your other credit limitations.

I recently had the bank try to raise the rate because my credit score went down. The reason my credit score went down was because they kept checking it every month for the several months it took to close the construction loan. Oddly, it didn’t affect my husband’s credit score. But they had to honor our rate when we pointed out that they, in fact, were the ones who dropped my score due to their shenanigans.

Note: If you are shopping loans and there are many credit checks in a very short period, it should not affect your score. The issue here was that they were spread out over months and could give the appearance of me trying to buy numerous homes.

If your available credit was decreased it was because the furniture company put through the charge but has not finalized it.

If you are concerned that it will affect your mortgage application I would like to point out to you and others that just because you apply for a mortgage does not mean that you will be accepted nor does it mean that the purchase of the house will be finalized as too many things can happen. Buying furniture for a new home before having the new home is to use an old saying 'putting the cart before the horse'. Another thing I have seen is people extending themselves financially especially first time home buyers purchasing too much on credit.

Agree with the consensus above - cancel the furniture purchase.

Yes, reduction of available credit can reduce your score enough to no longer qualify for the mortgage particularly if you were just above the qualifying score when you made application.

Don't make any financial changes - particularly added debt/future debt - after you have made an application for a mortgage. Maifleur03 said it best.

The way the "system" calculates a credit score can be really screwy.

For example, when I used my credit card each month for construction expenses (usually $3-4K/month), but also paid off the entire balance each month, they always reduced my credit score because my "outstanding balance is too high". It was worst if they pulled credit right before I paid my bill, since I might have $3k balance due from last month (that would be paid in a day or two), and also another $3k on the card that had built up since the statement close date. I never got a bump up in credit score for paying my bill in full and on time each month.

I've got a mortgage application pending right now, and have started making payments on my credit card each week as the charges accrue. That way there will only be a small balance at any given time, regardless of when they pull my credit.

Bruce

Don't accrue any additional debt (even pending charges) until after the loan closes. Your application might be approved but it can be kicked back out when it goes through final underwriting.

Any pending purchase will affect your credit score. At best, you will be yelled at by the loan officer. At worst, they will decline to fund your loan.

While the furniture company did not run the charge through, they did reserve credit against your account in the amount of the furniture purchase. While $100 won't make much of a dent, $1,500 will definitely be flagged.

I advise that you cancel the purchase. Be prepared to show proof of cancellation to the loan processor. Nobody cares what you do to your credit the day after you close. They only care about it the day before and the day of. Makes little sense other than to realize they are coving their own backside.

There are so many unforeseen pitfalls to purchasing a new home. This is one of them. Try to live your life as if all credit has been frozen for the next few weeks. Pay only the necessary bills. Don't pay anything large off. Be prepared to explain and prove receipt of any money or disbursement of any money. I've seen them question $50 purchases. Treat it like big brother is watching you. Because he is until the closing.

Don't count your chickens before they are hatched.

I've had a couple of clients purchase cars prior to their home final that created some challenges for their perm loans.

I also heard that it is better not to make big purchases while the mortgage application is pending.

Irony is making a payment for a less than $200 balance and the logarithms sending to the credit reporting agencies as paying off a card. Yes I did pay the balance so technically it did pay it off. Not technically the monthly credit score that my bank sends to me showed it dropped 13 points because of the payment. Timing is apparently everything.

Well, I googled and found 5 things not to do during mortgage approval, such as: 1. Don't apply for new credit 2. Don't miss credit card and loan payments 3. Don’t make any large purchases 4. Don’t switch jobs 5. Don’t make large deposits without creating a paper trail. Think you might find this useful. Besides, you should know that any major changes in your personal income, assets, or debt can change the terms of your mortgage offer or completely destroy it. If you are not sure how the action may affect your application, you can seek advice from your mortgage broker. By the way, I know an experienced mortgage broker Birmingham that works 24/7 and solves any mortgage issues, so you can contact him.