Do not apply for credit cards if you have plans to buy a house in the near future
Mortgage companies look down upon credit inquiries when considering your credit worthiness, so you should not apply for credit cards if you’re in the market for a house. If you are within a year of buying a house, do not apply for credit cards until after closing. To be safe, some even say if you’re within 2 years of buying a house, do not apply.
For about a year now, Ryan and I have missed out on some great signup bonuses since we are building a new house. I will admit to opening the Chase Sapphire Reserve last year. At the time we were a year out from our estimated completion date on the new house. When Chase first launched this card, there was a 100,000 Ultimate Rewards signup bonus. I just could not resist, so I had to apply. Other than that, we have not opened any new accounts. We are so happy that it is almost time to close on the new house and we can soon start getting cards again!
Silver lining: Chase offers 100,000 Ultimate Rewards for taking out a mortgage
Earlier this month, we received a closing date for our new house. We needed to start thinking about locking in our mortgage rate. When we applied for the mortgage to build the house, we just went through our same mortgage company for our current house. It was easy because we had an existing relationship and they had good rates at the time. We were too far out to lock in those rates. Fast-forward to a year later and the rates have increased. This was expected since mortgage rates have gone up across the board no matter what bank you use. We decided that we should probably still shop around. I immediately started my search and started googling and calling around. During my search, I found out that Chase was offering a 100,000 Ultimate Rewards bonus to take out a mortgage.
I called Chase to inquire about their rates and to get details about this offer. Here is what I learned:
- This offer is for anyone who has a Chase Sapphire Preferred or a Chase Sapphire Reserve card that was opened prior to May 7, 2017
- You must apply for and be approved for the loan by August 6, 2017
- This offer is stackable with another current offer: $595 cash back after closing a mortgage with Chase
- The points will be deposited to your Chase Ultimate Rewards account within 10 weeks after closing
- There is no minimum mortgage to get the points
Should you take out a mortgage just to get 100,000 points?
Absolutely not, but we did ultimately (see what I did there?!) choose Chase. While the 100,000 points bonus is going to be nice, there were other factors that led us to the decision.
- The rates we were quoted were as good or better than other banks. At the time of this post (May 2017), Chase is known to have competitive mortgage rates.
- In addition to the $595 cash back we will receive, we were also offered extra money that we could either use for closing costs or to further buy down our rate. Other banks offered similar incentives, but Chases’s were better.
These factors plus the 100,000 bonus points made it a no-brainer to use Chase. In fact, a loan officer from one of the other banks reached out to us after we informed them that we would not be moving forward with them. He asked what he could do to match the deal we chose. After explaining that he would have to give us a better rate, plus the cash incentives, plus enough cash to match the value of 100,000 points, he realized we were getting a pretty good deal. He was not able to match it.
How much are 100,000 Ultimate Rewards worth?
At least $1500 with the Sapphire Reserve and at least $1250 with the Sapphire preferred. This is if booking travel through the Ultimate Rewards redemption portal. Remember that you will usually get even more value by transferring your points to Chase Ultimate Rewards partners at a 1:1 ratio. If you want to learn more about booking through the portal vs transferring to partners, read this post.
For example, you could transfer the points to Korean Air and book 4 roundtrip Delta flights from the US to Hawaii. Or you could use Korean Air to get 2 roundtrip first class tickets to Hawaii on Delta and still have points leftover! Both of these options are worth at least $2500. This is of course only if there is availability on Delta flights. Never transfer points until you’ve confirmed availability on your flights!
Chase may not be the best mortgage company for everyone, but it’s definitely worth looking into their rates if you’re in the market for a house.
Even without the 100,000 points, Chase would have been the best deal for us, so this is a nice surprise! Getting a big bonus like this almost makes up for all of the signup bonuses we’ve missed out on over the past year!