09-25-2013 04:41 AM
09-25-2013 04:45 AM
Our mortgage banker said to reduce credit card debt...if you've got a banker that you want to work with, call them and ask which matters more.
In our case, the banker wanted NO credit cards over 50% util to help with FICO score, the higher FICO score allows her more room to wiggle with DTI.
YMMV of course.
09-25-2013 04:45 AM
How long would it take you to pay down both cards? I can tell you that Uti is a large factor in your score. Not that you said you are, but I would not app for any new cards to lower your uti only because you will begin the process of mortgage pre-qual in Jan.
09-25-2013 06:09 AM
The advice of talking to a broker is a good idea, just don't let them HP your account. If it really is an either-or, the question is how much have you saved (and how much could you save if you don't pay down the cc) towards the down-payment. Where a broker might be able to help is to give you some idea of the score brackets. So maybe getting to 700 won't help a lot compared to where you are (in which case save for the down-payment) or doing that will push you into a much better rate, saving tens of thousands over the life of the mortgage, in which case pay the cards down instead. I also don't know how much improvement you will get from going from 80% on two cards to 50% on two cards.
09-25-2013 06:43 AM
09-25-2013 08:49 AM - edited 09-25-2013 08:51 AM
So, I have a Citicard with 4,000 out of 5,000 and chase 4,000 out if 5,000. Score is 677 trying to get to 700 or higher to qualify for a good mortgage. I would like to start process in Jan to look for a house. Should I take the money and save for house or pay down credit cards. Really need to move
Do the math. 8,000/10,000 = 80% which is way too high to apply for anything. +1 for talking to a broker first though.
09-25-2013 09:34 AM
Also please remember if you do not put 20% down, you will pay PMI for an FHA for the LIFE of the loan. It cannot be removed as in could in tbe past. This could add an extra 1% to the rate of your loan...
Compound that over 15-30 years and see which is more expensive..
+1 for >= 20% down.
09-25-2013 10:48 AM
Forums posts are not provided or commissioned by FICO. Forums posts have not been reviewed, approved or otherwise endorsed by FICO. It is not FICO's responsibility to ensure all posts and/or questions are answered.Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.
* For complete information, see the terms and conditions on the credit card issuer’s website. Once you click apply for this card, you will be directed to the issuer’s website where you may review the terms and conditions of the card before applying. While myFICO always strives to present the most accurate information, we show a summary to help you choose a product, not the full legal terms - and before applying you should understand the full terms of products as stated by the issuer itself.
IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more
FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.