What's more important?

[Anonymous]

When going for a mortgage is it more important to have more money for the downpayment or to have your DTI down?

I'm hoping to get a mortgage next year after my credit cards are paid off. But I was wondering about my next step after that.

Once the credit cards are paid off on 2/6/09! I will have only a student loan, which I'm leaving alone, and a car loan with 21 more payments. In the span of 2-3 months I can get that cut down to 9 payments, which I've heard means it will not be included in my DTI, which I know is important since the payment is 507.96 and I only get $3800 gross income a month, not counting the part time job I don't want to keep incredibly long after I get the house.

But my question is that at that point I will have about $1200 saved up, I know not a lot. So would it be better to save the money I was going to direct towards the car payments, or pay down on the car?

Thanks!

[DallasLoanGuy]

GREAT question.

this is why i always suggest that you apply sooner than later.

we have ways to 'simulate' most of this in the software.

fha doesnt have reserve requirements though, so i would bet that lower dti wins over cash reserves.

[Anonymous]

I was wondering the exact same thing! Thanks Dallas!

[Anonymous]

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@DallasLoanGuy wrote:

GREAT question.

this is why i always suggest that you apply sooner than later.

we have ways to 'simulate' most of this in the software.

fha doesnt have reserve requirements though, so i would bet that lower dti wins over cash reserves.

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Great, thank you! I was thinking about going to see a loan officer prior to completely paying off all my CC's, though definitely getting it to under 10%util, so I'll definitely do that!

Thank you!