Need some advice

[ajzjmsmom]

I have posted before that I am getting ready to jump into the water and buy another house, in January I was able to pay off by debt after retiring by accessing my 401K.  On 1/13/14, I ran my credit on here and my scores were as follows;  EQ 752, TU 708 and EX 724.  Today all my scores are EQ 786, TU  776 and EX 800.  On two reports it shows 3 accounts that have yet to update with balances of 5993 with a 6500 CL, 1143 w/1600 CL and 1044/5900 CL, and the payments are 180, 37, 22.  On my EX the 1044 shows as paid off.  Then on all three reports I I have 3 accounts showing balances of 48, 47 and 22, these were the interest I got stuck with since I carried balances..  The only negatives that were on my credit report in Jan was the high CC balances, on all three accounts these now show as good.

I talked to my lender yesterday and he said I could go ahead and do my application that now my DTI was good but I was wondering if it would be better to wait a couple more days and see if those three accounts showing larger balances update?  All three updated last month on the 31st, so if I wait until at least the 4th maybe they will show up on the CR.  My income is a retirement pension of 60,840 per year and have about $45 thousand in reserves but don't want to put it all towards the house, I am looking for a 5% conventional in the $200k  range, would prefer to keep it under 180k so as to have the monthly mortgage I want.  I know there is the potential for my scores to be different when the lender runs them but will my rates get any better if the scores go higher?   I entertained the idea of an FHA loan but with all the changes would prefer not to, if I were your client what would you advise.  BTW buying in TN.

[seantsi90]

I would use the scores now before those high utility balances show up. The preapproval will score high and by the time you actually close on your home purchase maybe lower the balances before the final credit pull. But thats what I would suggest. 

[ajzjmsmom]

---

@seantsi90 wrote:

I would use the scores now before those high utility balances show up. The preapproval will score high and by the time you actually close on your home purchase maybe lower the balances before the final credit pull. But thats what I would suggest. 

---

Guess my post wasn't clear, the credit scores include those high balances and once the CR's reflect the new balances I expect the scores to go alittle higher.

My TU report shows a 11% utility of credit, so my question was would I look better to lenders if I waited until the larger of the balances reported or am I good to go now?  My DTI is about 30% when youi include my current monthly payments and the mortgage I am expecting to get approved for.

[madmann26]

Outside of DTI,

The few points that you would gain, if any, probably wouldn't change things much, such as the interest rate of the loan.

[ajzjmsmom]

---

@madmann26 wrote:

Outside of DTI,

The few points that you would gain, if any, probably wouldn't change things much, such as the interest rate of the loan.

---

Since the DTI falls into an acceptable range it probably won't make a difference then if I go ahead and submit the loan app?  I didn't figure I would get any better of an interest rate with higher scores since most models lump scores in the high 700's with the upper range on the 800's.

[BrianB_The_Loan_Professor]

As mentioned unless the DTI is impacted there is no benefit in waiting - any score over 740 will get the same pricing/rate

Good Luck

Brian

[ajzjmsmom]

---

@BrianB_The_Loan_Professor wrote:

As mentioned unless the DTI is impacted there is no benefit in waiting - any score over 740 will get the same pricing/rate

Good Luck

Brian

---

For a conventional with 5% down, they are looking for a DTI of under 40% or would it be lower?  I can put more down but not 20% and don't want to do an FHA if I can avoid it.

I currently gross $5070 monthly and until the CR's report I show $334 in minimum credit card payments, looking to spend no more than $210K on a house with property taxes in the range of $1500 a year and have reserves in the bank for at least 6 months.worth of salary.

[BrianB_The_Loan_Professor]

Back end DTI of 43% or less is a good target - that cant all be housing though

Your numbers sound like they will be fine - 

You may want to consider a one time PMI with conventional it runs between 2-3% of the loan amount but eliminates the monthly add on to your payment -

with less than 20% down you will have one or the other on a conventional loan

[ajzjmsmom]

---

@BrianB_The_Loan_Professor wrote:

Back end DTI of 43% or less is a good target - that cant all be housing though

Your numbers sound like they will be fine - 

You may want to consider a one time PMI with conventional it runs between 2-3% of the loan amount but eliminates the monthly add on to your payment -

with less than 20% down you will have one or the other on a conventional loan

---

The DTI includes credit payments and expected mortgage including taxes, insurance and PMI and  the DTI is based on gross, correct?  If so with a mortgage of $1400 and the monthly payments that are still showing, I am sitting just a little 34% DTI?  Once those numbers update then I will have no debt other than a future mortgage.  Credit scores are all in the upper 700's when checked on here and other than utilizing 11% of my credit, the only other negative is a inquiry last March.  

Thanks for the information about the one time PMI, I will have to discuss that with the lender.

[DallasLoanGuy]

740 gets same rate as 850