Zeroing Out Housing Cost w/Credit Cards?

[PhilL]

I have large balances across several credit cards.

I am in the process of moving home to consolidate costs.

For banks, what impact would setting the money housing cost to $0.00 in the income question section have on my relationship with them?

It's not going to cause something crazy like balence chasing or a financial review is it?

[JoeRockhead]

It would lower your DTI ratio which might be helpful when applying for new credit. Balance chasing generally occurs when lenders see you're carrying large balances and not making any meaningful progress in paying those balances down. Only paying the minimum would indicate finances are strained, or stretched too thin. The more high balances you carry on individual accounts, the more the chances for balance chasing goes up. Miss a payment, the chances are even greater. 

[pizzadude]

Good points above, also will add that I'm not sure there's any real benefit gained by submitting $0 for your housing cost.   I doubt it would  materially affect your approval / credit limit. 

[NoHardLimits]

The banks don't ask why your housing cost is zero.  For me, I put zero housing costs on my credit card applications because I have no rent or mortgage payments.  I own my primary residence free and clear.  Zero housing costs allows me to have a debt-to-income ratio of only 1% which is extremely low risk from a credit underwriting point of view.

[FicoMike0]

I don't quite get the op question. Reporting zero housing cost will only have a positive effect with you bank, why would you think otherwise?

Do you think they won't believe you? That's a different issue.

[Snook_on_the_Line]

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@FicoMike0 wrote:

I don't quite get the op question. Reporting zero housing cost will only have a positive effect with you bank, why would you think otherwise?

Do you think they won't believe you? That's a different issue.

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My housing cost is zero.      But I always enter 355 which is the condo board fees that I pay monthly.  

I do it Because the condo is in my gfs name and I feel like they won't believe me I put zero.  

[ptatohed]

^^^

Yup, I think I have read a few times that people have had trouble with $0 so the recommendation is to just use a low number.  

[FicoMike0]

I always put zero. I own my house, it's the truth. Never been questioned. I suppose they have many pieces of info to consider. I've lived here forever. Had an account at the same local bank forever. Been registered to vote. My address is a single family house, there's no mortgage associated with the address. I'm old. I suppose if some of these facts were different, they might be suspicious.

As to the original question, the wells app feature that gives your dti explains that you are more likely to be approved for credit with a low dti. I suspect that I might get a little bigger cl for my income, due to a 1% dti. 99% of my income is disposable.

I also wonder if I fare better because my income sources are retirement derived. When I was working, I could lose my job. Not likely to lose sociable security and pension. My investments might tank, but not likely to zero either.

[ptatohed]

Are housing costs ever really $zero?  Insurance, taxes, for some HOA?  

[FicoMike0]

@ptatohed 

The question they ask is what you pay in rent or mortgage. They don't ask about taxes, insurance,  hoanything or anything else.