Home Loans and Credit Card Debt Question

[turninganewleaf]

Hello,

I'm looking at purchasing a home in the next couple of months and I'm trying to understand how lenders consider credit card debt. Following is a list of credit cards I have, CL's and current balance.

1.  AMEX, CL $1,000 (current balance is $182.00)

2.  Chevron, CL $400 (current balance is $35.00)

3.  Target, CL $500 (current balance is $0)

4.  Credit First (Firestone), CL $1200 (current balance is $131.00)

I understand about utilization percentages (that my utilization needs to stay below 10%) but the above balances will be paid off 2/6/08, leaving $0 due on all my cards.  I pay every card I have in full every month (but the above balances will report).   So...if I'm paying in full every month, do I technically have debt that I would need to report to a mortgage lender?  If so, would the reported debt be my balance owed or the minimum payment due? 

Does my question make sense? 

[Anonymous]

Congrats on doing a great job of keeping util down but still having balances report.  It's practically an art, isn't it?

You have a *whopping* $348 in debt which as you know is used for overall util calculation, but for DTI (debt to income purposes), I think a lender calculates the total of the minimum monthly payments.  It really doesn't matter because you are in Negligible Debt Territory.  WTG!

[ShanetheMortgageMan]

The lender will get your credit card balance information from the credit report they pull, but if you can provide $0 balance statements then you should be able to exclude all of your credit card minimum payments from your debt to income ratio calculation.

[Anonymous]

Shane - thanks for correcting me!

[ShanetheMortgageMan]