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New Member
aimeenp
Posts: 3
Registered: ‎01-24-2013
0

How to look the best for mortgage approval by April?

Hey everyone,

 

I just signed up today, bc i was curious about my FICO for mortgage purposes.  My husband and I are looking to buy a house and get approved around April.

 

So here is the conundrum...

 

my Trans Union and Equifax FICO's from this site are 709 each.  My Credit Sesame score, which i did before reading that it's not usually accurate is 724.  My Husbands Credit Sesame Score is 742, but we haven't checked his FICO's.  I am the bigger earner, if that matters.

 

The only reason why my score is 709 is high credit card utilization/balances.  My current utilization is 38%.  From now until march, i can get it down to 25-30%, and bring two accounts to zero, without touching any down payment money.   I could go futher and pay more, but reduce my down payment.

 

For mortgage purposes, is it better to keep as much money as possible for downpayment or pay off more debt but put less money down?  I would be getting a conventional mortgage.

 

Looking at the FICO ranges on this website and correlating interest rates, i am the 2nd from the top category, but the top category starts at 760.  So, to me, getting to 760 in 3 months sounds impossible, so I assume it would be better to just pay what i can and not touch the down payment money.  Please advise!

 

Thanks!

 

 

 

 

Valued Contributor
JM-AM
Posts: 3,303
Registered: ‎06-09-2010
0

Re: How to look the best for mortgage approval by April?


aimeenp wrote:

Hey everyone,

 

I just signed up today, bc i was curious about my FICO for mortgage purposes.  My husband and I are looking to buy a house and get approved around April.

 

So here is the conundrum...

 

my Trans Union and Equifax FICO's from this site are 709 each.  My Credit Sesame score, which i did before reading that it's not usually accurate is 724.  My Husbands Credit Sesame Score is 742, but we haven't checked his FICO's.  I am the bigger earner, if that matters.

 

The only reason why my score is 709 is high credit card utilization/balances.  My current utilization is 38%.  From now until march, i can get it down to 25-30%, and bring two accounts to zero, without touching any down payment money.   I could go futher and pay more, but reduce my down payment.

 

For mortgage purposes, is it better to keep as much money as possible for downpayment or pay off more debt but put less money down?  I would be getting a conventional mortgage.

 

Looking at the FICO ranges on this website and correlating interest rates, i am the 2nd from the top category, but the top category starts at 760.  So, to me, getting to 760 in 3 months sounds impossible, so I assume it would be better to just pay what i can and not touch the down payment money.  Please advise!

 

Thanks!

 

 

 

 


If you are both going to be on the loan then you need to know your husbands FICO score also. They will use the lower of the two middle scores for approval.

 

If you shop Lenders you should be able to still find a few Lenders with a 720 for their top tier rate, and many others accepting a 740 as their top tier rate. If you cant find a Lender directly on your own, then find a Boker who deals with multiple Lenders.

 

If both of your scores are in the 700's for your middle score, the rate will only matter if you are going Conventional.

 

As far as what would be better, paying down UTIL or putting into down payment? My opininion is it all depends. How much of a down payment were you considering to pay? 30%, 20%, 10%, 5%, 3.5%? Also depends on the type of loan you are considering, the price of the home, and your income.

 

Good Luck
May all your dreams and wishes become a reality!
Established Contributor
bettercreditguy1
Posts: 759
Registered: ‎02-11-2012
0

Re: How to look the best for mortgage approval by April?

+1 to it depends on what to do with your cash. To get the best rates additionally, you will  need at least 20% down in a trade in or cash so you will not need PMI Insurance. For now, I would keep my cash position as high as possible. When you start your mortage process, it looks good if you have cash on hand, It shows you can manage money and save. You will also then get a feeling from the LO on possible directives for some of your cash. Good luck!

Starting scores 01/02/2012 EQ 707(Fico) TU 733(Fico) EXP 735 (FAKO)
Updated scores 06/01/2014 EQ 797(Fico) TU 768(Fico) EXP 769 (Fico), EQ 849 (Next Gen 5/27/14 Penfed)


Remember the Three P's: Pay early in Full, Pay on Time, Patience
New Member
aimeenp
Posts: 3
Registered: ‎01-24-2013
0

Re: How to look the best for mortgage approval by April?

Our income is about 170k/year.  The house we want is 400k and we are only planning on putting down 5%.  We were planning on waiting another year to get a bigger down pay,ent together, but we decided with rising prices in our area and good interest rates now, to go ahead and buy sooner even if that means less money down.  All the house calculators say we can afford 420k to 450k depending on the calculator.  Obvi we will do conventional in that price point.  

 

So is the consensus keep the cash and pay the cards down if the loan officer asks us to?  Will my score really go up that much in a couple months if I drop the util rate below 30%?  I am wondering if it would go up enough to make a difference in my interest rate...

New Contributor
cleansheet
Posts: 71
Registered: ‎12-20-2012
0

Re: How to look the best for mortgage approval by April?

I don't think getting your util down to 25-30% will make a big difference to your score.  It will be some, but probably not enough to make a big % change to your loan rate.  With only 5% down I suspect you will gain more benefit from increasing this amount.



Starting Score: 2012-10-06 EX: SSN has not been allocated! (funny I pay my taxes)
Current Score: 2013-10 Average 718
Goal Score: 760+


Valued Contributor
JM-AM
Posts: 3,303
Registered: ‎06-09-2010
0

Re: How to look the best for mortgage approval by April?

While we all have expenses, with a 170k year income you should be able to pay that debt off. Cut back on all the frivolous things you can think of, even if only temporary.

Dont take this post to heart.

You are approvable as is, just depends on what you are trying to get out of increasing your scores.



Good Luck
May all your dreams and wishes become a reality!
New Member
aimeenp
Posts: 3
Registered: ‎01-24-2013
0

Re: How to look the best for mortgage approval by April?

Thanks for the information. We could pay off 100% of our debt and were planning to, and wait to buy a house until next year, but as I said before, we decided it may be better to take advantage of the rates and lower prices (they are going up like crazy in the area we want to live).  So basically it's pay the debt off now and wait and probably be priced out of the area, or buy the house now and pay the debt next year.   

 

I actually had double the credit card debt that I do now and have paid half of it off.  Mixture of having a LOT of fun traveling, buying a house at a young age that ended up needing a lot of work (foundation, roof, ceiling cave in, etc) and getting married.  Whatever the excuses, we have the debt, we paid half off but think it's probably better to get into the house now instead of waiting another year, with another year of paying rent that goes toward nothing.

 

There will be no more down payment than 5%, even though I know that is better.  I think my question is pretty much answered, keep the cash, bc paying off a card won't make a huge impact and put me into the next credit level for interest rate purposes.  Sounds like we can get a mortgage with 710 as the lowest middle score.  Hopefully all those online calculators are correct and we can get approved for what we want.

 

Thanks for all of your help!

 

 

Valued Contributor
JM-AM
Posts: 3,303
Registered: ‎06-09-2010
0

Re: How to look the best for mortgage approval by April?

You will be fine. :smileyhappy:
Good Luck
May all your dreams and wishes become a reality!

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