Help with my Installment loan Dilemma

[happy0510]

Hello, I'll be apping next month or so for a mortgage. I don't have any inquiries within the last year other than another app in February and was approved but I did not move forward at the time.

Anyway, both my hubby and I have maximized our scores with reporting 1% on one card and the only other active account is our Lease which ends in November 2017.  Now I know if it would have been a purchase, I would be in great shape as I won't have to use it in utilization.  Since it's a lease, it needs to be included till the last second.

Last week my boss sold me a car for practically nothing as a kind gesture.  I am now thinking of selling the lease and just using the car he gave me in order to improve our debt to income ratio.  The only problem is our scores will take a hit due to no open installments.

At this time our mortgage scores are as follows:

EQ 693 TU 715 EX 709 Me  / EQ 784 TU 773 EX 795 Hubby

This will be our second mortgage. We sold our house and it has reported.

Will the impact be too great on our scores?

[ArmyWifeMBA]

Maybe you can settle the lease right after you apply for the mortgage.  I think both installment loans need to be included especially to get your scores up.  Based on the mortgage scores listed, the lender will use your 709 score.  The better rates, from what my lender says, is for credit scores of 740+.  It has been stated by others on this forum that the second pull will be a soft pull to see if you got more credit or ran up credit.