Valued Contributor
IOBA
Posts: 2,697
Registered: ‎08-13-2009
Re: Unmarried couple buying house

We are trying to purchase a house.  A long, interesting story that has nothing to do with credit, just people.

 

DH has very low DTI.   One cc is close to the limit (zero interest for a year).    According to various sources, the high balance on that one card is holding his credit score back.   We learned that the creditor reports about the 25th of each month.   For us, it makes a difference in what products we qualify for as well as the interest rate.

 

We have the money to pay off the debt in full, but are choosing to leave it there because we want to put down 20%, avoid PMI, avoid escrow, and get a better interest rate.

 

Our son has offered to loan us the money to pay down the debt.  His terms are a one time loan origination fee of 3%.   (Bless his heart.   It is what the bank offered him for a personal loan, on a special deal.  He turned it down but offered to take it out for us instead, so it doesn't affect our credit.)

 

The moral to this is -- yes, pay down your debt.  It's also to important to remember that being close to the credit limit, as well as overall utilization, affect your FICO score.