 TITLE: 6 Steps to Refinancing Your Home Mortgage CONTENT: 6\\. Don't Open Any Credit During the Refinancing Process\n--------------------------------------------------------\nIn the time leading up to your mortgage refinancing, it's imperative you don't apply for new credit cards or loans. Because the mortgage lender will check your credit at the time of application and before closing, it's also critical to avoid opening credit accounts during the refinancing process.\nThere are a few reasons for this advice:\n*   **Credit score**: Every time you apply for credit, the resulting hard inquiry can knock a few points off your credit score. Depending on where your credit score stands, losing even a handful of points could impact your interest rate on the new loan. Avoid any action that could negatively impact your credit score.\n*   **Debt-to-income ratio**: Your debt-to-income ratio—the percentage of your gross monthly income that goes toward debt payments—helps determine how much you can borrow in terms of your monthly payment. Adding more debt will increase your ratio, and depending on where it was at before the new loan, it could make it challenging to get approved for the loan amount you want.\n*   **Risk**: A mortgage loan isn't just a big commitment for you; it's also a big commitment for the lender. If you're opening one or more credit accounts shortly before or during the refinancing process, it could cause a lender to think you're struggling financially and relying on debt to meet your financial obligations. In that case, a mortgage lender may lose confidence in your ability to make your monthly mortgage payments on time and either deny your application or charge a higher rate.\nAs such, if you're hoping to get a new credit card or car loan, wait until after you've closed on your refinance loan to apply for those credit accounts. END