Debt Ratio, Credit Score and Refinance

[Treesa]

I hope someone can give me some advice here....

We bought our second home last year and refinanced thru Wells Fargo...because my husband had a stronger credit score we financed thru him alone....we got loan with a ARM that will adjust in July 2008 and every 6 mos thereafter...well now that we have inquired about refinancing to a fixed 30 yr. Although our credit situation and debts are basically the same they state that we cannot refinance at this time....his income debt ratio is to high so we then included my income...I make more money but my FICO is lower.  Why was he able to get the original loan with no problem but just 10 mos. later he can't? Nothing has generally changed. They advised me that I would need to bring up our scores...mine is 569 and his is 626 and pay off some debt...mostly our vehicles...just need some advice...we are planning on paying off the three credit cards that we do have and then work on paying down the vehicles. Will a stronger credit score help the debt ratio factor? Please help.

Message Edited by Treesa on 05-08-2007 04:24 PM

[Anonymous]

From what I keep hearing mortgages are getting tough to get in the wake of all of the S/P lenders having problems. Sorry that it is affecting you.

Paying off the 3 CCs should help with your sebt/income ratio because your lender is using the minimums due on all of your cards to compute the ratio. Lower balance=lower minimum payment=better debt /income ratio.

Good luck

[Anonymous]

Treesa,

With FICOs of 569 and 626, either there's a huge amount of CC util or some bads.

Any collections, charge offs, recent lates?

Is the current mortgage current?

Are the vehicles current?

[Treesa]

I do have some old charge offs that will drop off this year...one next month and one in November...I am hoping this makes a difference...I did have collections that have been paid...we had gone thru a tough time a few years back due to a lay off and disability but my current credit is good...auto loans and cc are all paid timely...we plan on paying the cc off with 6 mos or so...hopefully this will help....thanks.

[Tuscani]

The charge offs are certainly hurting you.

[Anonymous]

Treesa,

What are the limits and balances of your CCs?

If there are any accounts with lates only, try GW.