Okay, here's a little background: 1. I have over 9,000 in credit card debt, 60,000 in student loan debt, 11,000 in car debt 2. I foolishly lowered all of my limits a few months ago(bad advice given) 3. I am applying for a mortgage right now 4. Prior to applying for the mortgage(this was not on my credit report when I went through the pre-approval process), I ended up charging close 1000 dollars on one of my cards without ever realizing we would be moving and needing to get a mortgage--EEEEK! I planned on paying off the 1000 dollars when I started back to work in the fall(I'm a teacher). 5. I am not a homeowner. We currently rent. 6. I have no collections or late payments(except one student loan in October 06, but that had to do with the postal service). 7. Our offer was just accepted on a house, which is 27,000 less than what we were pre-approved for. 8. I have cut up all credit cards as of this moment. I am also trying to get my APR lowered, but most companies are giving me a hard time due to my credit score---I am ashamed to admit, it was 626 when my mortgage lender did the preapproval(my husband has NO credit card debt, and his score is in the 700's). I need to be apart of the mortgage, as I bring in more money with my job. Should I be worried that since I charged the 1000 dollars, foolishly, that it lowered my credit score(now it is in 300 of my limit on that card). I sitting with our mortgage lender on Friday to fill out an application, but I just can't stop worrying about it Sorry this is long, but any advice? Be blunt and honest. I know the mistakes I have made, and now I think I am gong to pay for them
Can you pay the CC down before you close on the home loan? If you can you should have no worries. You may want to consider talking with a family member or friend until you get back to school in the fall. Or maybe a part time job. Or if your hubby can afford to take a hit of a few pionts you could transfer the balance to his CC. (only if he has enough util that it wont put him over the 1-9%) You did say he has 0 balances on cards.
Unfortunately, the only way we can pay down that cc balance is to take away from the money we have set aside for closing costs Like I said,I had planned on paying it down in September when I started to work again. A summer job is out of the question at the moment, as we are trying to relocate and I am starting at a new district, so I am in the car a lot and have a lot of workshops and orientations to attend.
I agree. Lowering the debt will increase your fico, but I am not sure that this will make a huge difference for your loan. You have no negatives, your husbands fico's are in the 700's, your scores are still good enough for prime lending, so it doesn't sound like there is going to be a huge problem. What exactly is your concern? Rate? Amount of financing?
Really, I honestly believed that my score would really look horrible to a lender, and therefore not want to take a chance on me as a borrower(since my credit cards are close to their limits, due to lowering them a few months ago). I am new to this whole understanding FICO and credit cards and such. Well, I know how to use them, but I am just learning how to help my score. Unfortunately, I didn't expect to have to get a house within two months, but since I am going to a new district, it made sense(it is difficult to rent with a dog). Although I realize my rate will be higher due to my score, I was just worried about getting the actual mortgage!
also, what is your utilizaton, they look closely at prior to closing.
When we closed on our second house, our utilization was higher than normal and they said we needed to pay off $8K of credit card debt. What they did was take $8 from the proceeds from the house we sold and sent it directly to the CC company and but doing that, we got a better rate.
Right, they do look at those things, but I don't think the OP will have any trouble getting a mortgage. I think her concern was that she wouldn't qualify with her scores, but her scores should be fine. No negatives, 2 incomes, sounds like she has low overall debt. I don't even think that her rates will be much over prime lending if at all. JMHO
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