We recently found a house we love, despite not intending to move for 2-3 months. I thought I had an additional 2-4 weeks for things to resolve on our credit reports before seeking pre approval, but our realtor is encouraging us to go forward so we don't lose this house. We do really love it and didn't expect to find something this early.
We have several small balances that we pay in full after the statement, so they are reporting minimum payments $25 to $35 each, plus an Amex that it sounds like many lenders will count the full balance. All of these are paid in full now and we will pay them before the statements going forward, but they won't be reporting until anywhere from 4/4 to 4/17. Altogether these increase our monthly debt obligation about $250, plus the Amex balance. I also paid down a few thousand on other 0% cards that will reduce our overall utilization from 12% to 10%.
Our DTI is at 38% with the $250 included for the amount we want to qualify for, so I think I would have to ask our lender to exclude them and give documentation that they are paid to show we are at 36% - will lenders accept that for pre approval amount? I plan to call the lender later this week to ask, I just keep hoping to see individual accounts slowly drop off the report to avoid this whole issue.
I expect all these moves will improve our FICO scores (right now 749 to 783) as well as our DTI ratios by mid April. Would it be better to wait until mid April and just risk missing out on this house to ensure everything is in line for pre approval? Or does it not matter since our credit will be pulled again at closing and will show improvement? What happens if we happen to currently fall in a cutoff and we qualify for a better rate at the actual mortgage approval or at close - would they give the better rate at that point or is it too late?
