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Chocoholic73 wrote:
So here's the thing, after having a recent derog removed from my credit report, my score jumped from 563 (EQ lender pull 5/6) to mid score of 622. (EQ lender pull 6/25). According to LO, they can use that score for FHA with 3.5 DP at 4% interest rate if I lock in now. However, we were trying to qualify for DP assistance and the score needed is 650. We have cash that we're saving in case we didn't qualify for DP assistance, but the LO mentioned two scenarios and I can't decide. 1- Just pay the DP with our savings and forget about the DP assistance, or 2 - use the cash or some of it to pay off the CCs, do a rapid rescore and hope that it gives us the additional 28 points to qualify for DP assistance. We have about 12k in savings, and our CC debt are as follows: CC 1 - 4500/ 6300 CC 2 - 2400 / 3200 CC 3 - 1600/ 2500 CC 4 - 315/ 1000 CC 5 - 295/ 1005 If we choose scenario 2 and end up getting 650, then we'd be debt free by the time the mortgage kicks in and we'll have extra cash to use for moving expenses. But my fear is, if we don't end up getting 650, then we wouldn't have enough left for the DP What do I do? Help please...
Here's my idea....by paying (at least) the amounts below, 2 cards will be paid off (you know FICO scores on how many cards carry balances, no matter the limits) and all 3 of the others will be at least under 50%. If you have other cards with a zero balance, that will reflect in an even more positive light. The rest can be applied to a down payment. I am not fully sure how the rapid rescore works, but this has to be done after those payments are made & (I believe) posted to the bureaus. See what the new FICO's are & move forward from there. If you can, put even more toward that first card & get all with balances under 30%.
CC 1 - 4500/ 6300 $1500 bal will be approx 47%
CC 2 - 2400 / 3200 $1200 bal will be approx 28%
CC 3 - 1600/ 2500 $1000 bal will be approx 26%
CC 4 - 315/ 1000 PIF
CC 5 - 295/ 1005 PIF
GOOD LUCK AND I HOPE YOU GET YOUR HOUSE!!!!
@BungalowMo wrote:@Anonymous wrote:
So here's the thing, after having a recent derog removed from my credit report, my score jumped from 563 (EQ lender pull 5/6) to mid score of 622. (EQ lender pull 6/25). According to LO, they can use that score for FHA with 3.5 DP at 4% interest rate if I lock in now. However, we were trying to qualify for DP assistance and the score needed is 650. We have cash that we're saving in case we didn't qualify for DP assistance, but the LO mentioned two scenarios and I can't decide. 1- Just pay the DP with our savings and forget about the DP assistance, or 2 - use the cash or some of it to pay off the CCs, do a rapid rescore and hope that it gives us the additional 28 points to qualify for DP assistance. We have about 12k in savings, and our CC debt are as follows: CC 1 - 4500/ 6300 CC 2 - 2400 / 3200 CC 3 - 1600/ 2500 CC 4 - 315/ 1000 CC 5 - 295/ 1005 If we choose scenario 2 and end up getting 650, then we'd be debt free by the time the mortgage kicks in and we'll have extra cash to use for moving expenses. But my fear is, if we don't end up getting 650, then we wouldn't have enough left for the DP What do I do? Help please...
Here's my idea....by paying (at least) the amounts below, 2 cards will be paid off (you know FICO scores on how many cards carry balances, no matter the limits) and all 3 of the others will be at least under 50%. If you have other cards with a zero balance, that will reflect in an even more positive light. The rest can be applied to a down payment. I am not fully sure how the rapid rescore works, but this has to be done after those payments are made & (I believe) posted to the bureaus. See what the new FICO's are & move forward from there. If you can, put even more toward that first card & get all with balances under 30%.
CC 1 - 4500/ 6300 $1500 bal will be approx 47%
CC 2 - 2400 / 3200 $1200 bal will be approx 28%
CC 3 - 1600/ 2500 $1000 bal will be approx 26%
CC 4 - 315/ 1000 PIF
CC 5 - 295/ 1005 PIF
GOOD LUCK AND I HOPE YOU GET YOUR HOUSE!!!!
I agree with the above post except for one thing...see if you can pay off cc 3 totally so you have 3 cards reporting zero balance and the other two as above. You should get a very decent score bump even if the one is reporting a 47% utilization. Those zero balance cards will really help boost your score.
Paying off the 3 cards will go a long ways and as you chip away at the other two cards you will see even better results
It really depends on what bucket you are in for how much of a bump, if any, you will get when you pay down balances. For most people, card balances at 0 while having 1 or more others over 10% utilitization will not gain many score points, if any, if you have recent (last 24 months) collections. Unfortunately, you do not seem to have time to experiment. If it were me, I would plan my budget, run the numbers, and look at short term and long term results and plan accordingly. While the immediate goal of getting a mortgage is important, it is not as important as long term financial health. And, no matter how much urgency you feel you have, you can usually wait while you take steps to get set on a long term journey that leads to the right place instead of taking quick steps leading to a lesser destination.
I gained quite a few points from getting under 10% util.... that being said i gained no point bump from 10-30%....
Depending on how much you have in the bank, i would try to pay down the two that carry the largest balances....
Paying 4500 down on the first one will only get you down to 32% util (from your current 60%) ...
paying down to 32% more then likely will not provide a large score bump....
Paying down the top two will get you down to about 14% give or take a couple % points.... This may not provide as large of a score bump as you need either......
IMHO, i would pay the down payment your own, and work on getting these down over time.... no reason to risk not being able to get the house because you paid your CC's down for it not to help as much as you need......
Awesome! let us know!
Awesome!!!!
Congrats!!!!!