Amex, DTI and getting a mortgage

[Anonymous]

We have fairly high scores with our average 730ish.  We have high income but also have DTI over 45%.  We charge everything (almost) each month on our amex then pay off.  This is what is driving the DTI so high.  How do mortgage companies look at this debt since i heard there was a change happening and should we switch to paying with our debit card until the are approved?  

[Anonymous]

I am by no means an expert, but from everything I have read, you should pay off your account BEFORE the due date so that it is before the statement frame. So if your statement date is, for example, February 5, you should pay your account in full by February 4 and not run it up again until after statement date, then pay off again before statement date. :-) 

(Again - totally new to this whole credit fixing thing, but basing my answer on what I have read.) :-) 

[kc0039]

We'll use the monthly amount showing on the credit report. If the monthly payment is the same as the balance (Which is how AMEX mostly reports, idk why) we'll use 5% of the balance as monthly payment. Also, DTI can be over 45% but less than 50% with conventional loans

[Revelate]

---

@kc0039 wrote:

We'll use the monthly amount showing on the credit report. If the monthly payment is the same as the balance (Which is how AMEX mostly reports, idk why) we'll use 5% of the balance as monthly payment. Also, DTI can be over 45% but less than 50% with conventional loans

---

That's an interesting way to do it; you likely see that as most of the Amex accounts are likely charge cards, with a term of 1 month, which means the statement balance must be PIF regardless.  I would've thought that would be discounted by most of the automated software that goes through most mortgages these days.

OP: someone called it right previously, just hammer the balance before the statement cut date and problem solved.  Generally people have recommended even in the FICO optimization strategy of all zero except one, don't put that single balance on an Amex charge card... do a national bankcard revolver.

This would be an excellent example why apparently heh.

[Klbb]

In order for your balance to report lower, you need to pay the balance by the statement date, not the due date.  You need to call your CC companies and ask when your statement date is (or when your cycle date ends) each month.  This is the date that your balance/utilization is reported to the credit bureaus.  For example, one of my cards has a statement date of January 10th, with a due date of February 7th.  Any balance that I do not want to report must be paid by the 10th of each month.  So any Christmas purchases I placed on my card (which really increased my utilization) will need to be paid off by the 10th of January to avoid a high utilization being reported to the credit bureau.  I will pay my card down to 9% utilization on January 10th, and then pay off the balance by the due date of February 7th to avoid interest charges.

Hope this helps.