Will paying off your mortgage boost your credit score

[Anonymous]

Hello

We are in the process of selling our home, if we pay off our current mortgage will this boost our credit score....

Any help appreciated

thanks

[Anonymous]

I'd be surprised if your score didn't go up after paying off a mortgage, just for the simple reason that your total debt load and monthly payment totals will plummet. Seems like a formula for a score increase in my opinion, but I'm only guessing. Of course, if you then go and obtain a new mortgage on another home, then that could cause it to go right back down again.

Any mortgage experts out there wanna take a stab at this?

[Anonymous]

bump

anyone else know

[Boswd]

In all honestly, who cares if it does or doesn't.   As the other poster pointed out your Debt to Income ratio will plummet and that's a great thing, image what you can now do with that extra money, save, save for a nice vacation, get caught up on other bills.   If I were in your shoes, I would pay off the mortgage and not worry at all about if the FICO score will rise.    Who cares 

[Anonymous]

I care let me explain my  husband and I are getting a house builit and is selling our current home I wanted to know if the sell of our current home will boost our score before closing...we don't close until the end of this year.

[Boswd]

It may but it definitly won't hurt your score.   Will need some more info though.   How will you be financing the building of your new home.  

If you are taking on another mortgage, do you really want to carry the new one with a balance on the old one?

[Boswd]

Also you have to remember with mortgage lenders,  your debt to income ration is just as important if not more important than your credit scores.   by paying off the current mortgage you not only lower that which will be huge plus in your favor but  you are also showing the lender that you are a good risk.  You took out one mortgage and paid it off.

But again would need more info on how you are financing the new home.

[Anonymous]

Hello Bos, thanks for replying

We go to settlement on the old house on July 30th. Yes we are taking on a new mortgage...our new house will not be finished until December....We will be renting until it is finished

Thanks