Mortgage Score Optimization

[amclaughlin42]

Ive been working hard to pay down debt to buy a home(Im not a first time homebuyer)

Ive been using avalanche method mostly so my interest doesnt swallow me whole. 
I can have all revolving accounts at 0 in 6 months or maybe less. 

How much does recent lates effect you? I sent goodwill adjustment email, but I have yet to hear back. 

AZEO seems like a popular method(Ive done this before but had alot less accounts back then.)

AZEO or just getting aggregate utilization below 10%?

Is aggregate utilization more important than overall? 

How are collections figured into DTI? (These are not mine, Getting validation letter and disputing them currently- one was already removed)

Is it possible to get preapproved for a mortgage if aggregate utilization is above 30% but DTI is low? 

Accounts - Revolving

Chase - $1691/$3500 - APR 28% - Reporting over CL Reports 2nd
Capital One QS - $0/$600 - APR 31.49% Reporting over CL Reports on the 24th

Capital One WM - $0/$300 - APR 31.49% Reporting over CL Reports on the 24th
Avant - $0/$300 - APR 30% Reporting over CL - Reports on the 23rd - I paid it off but its showing some odd stuff on my account, Ive called twice and almost no one has answers to whats going on with my account. 
Credit One - $843/$800 - APR 17.9% Reports on the 13th

NFCU Cash rewards - $6274/$6400 - Reporting over CL - Reports on the 4th

Installment 

Mariner Finance - $2218 35% APR - $102 

NFCU Auto - $13288- APR 9.69%

Student Loans - $28k - COVID Deferment 

Collections are all being disputed as I should have no collections. 

[ShanetheMortgageMan]

AZEO will get you the most score benefit vs. just getting the aggregate under 10%.  Recent late payments (and payment history in general) and revolving utilization are probably the two biggest factors that impact mortgage scores, I'd continue to follow up on the GW adjustment you requested.

Collections typically don't need to be paid, but if you are applying for FHA financing and the total aggregate of non-medical collections is $2k+ then 5% of the total balance will be added as a monthly payment to your DTI calculation.  If that pushes your DTI too high then the other options are to pay off the collections at/before closing, or you can enter into a repayment agreement and the agreed upon payment amount will be used in your DTI instead of the 5% of the balance calculation.

It is certainly possible to get approved for a mortgage with aggregate utilization is above 30% and a low DTI.  Like any loan approval, it'll be a comprehensive analysis of your entire situation that is considered.

Student loans in deferment/repayment are typically qualified by using .5% of the total balance to include as a payment in the DTI.  You'll also want to make sure all the dispute comments have been removed from accounts that have balances before your credit is checked for the mortgage pre-approval.

[amclaughlin42]

I will definitely go for AZEO, but my question is this, lets say for instance, my individual utilization on my last card is high but my aggregate utilization is at the 7-9% mark? That would be more beneficial than it spread throughout? 

Collections shouldnt be an issue once the inaccuracies are fixed. Even with my full collection balance currently, my debt payments as high as they are currenty and student loan at .5% of the balance with what my estimated mortgage payment would be at the most I would only becoming at 25% utilization.

So that shouldnt be an issue. My employment history and income will be enough. 

I will be sure all dispute remarks are removed prior to mortgage preapproval. 

[VAMortgageGuy]

Accounts - Revolving

Credit One - $843/$800 - APR 17.9% Reports on the 13th

NFCU Cash rewards - $6274/$6400 - Reporting over CL - Reports on the 4th

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In my experience as a loan officer for the last 22 years, these 2 accounts are the ones hurting your scores the most.

[ShanetheMortgageMan]

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@amclaughlin42 wrote:

I will definitely go for AZEO, but my question is this, lets say for instance, my individual utilization on my last card is high but my aggregate utilization is at the 7-9% mark? That would be more beneficial than it spread throughout? 

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A better section to ask that in would be Understanding FICO® Scoring.  Or @Brian_Earl_Spilner might be able to give their opinion in this thread.

[Brian_Earl_Spilner]

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@amclaughlin42 wrote:

I will definitely go for AZEO, but my question is this, lets say for instance, my individual utilization on my last card is high but my aggregate utilization is at the 7-9% mark? That would be more beneficial than it spread throughout? 

Collections shouldnt be an issue once the inaccuracies are fixed. Even with my full collection balance currently, my debt payments as high as they are currenty and student loan at .5% of the balance with what my estimated mortgage payment would be at the most I would only becoming at 25% utilization.

So that shouldnt be an issue. My employment history and income will be enough. 

I will be sure all dispute remarks are removed prior to mortgage preapproval. 

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In a nutshell, less cards carrying a balance are better for mortgage scores. So it would be better to have a single card carrying a balance rather than spread the balance across multiple cards. But you also have to take individual thresholds into account. Using the balance you posted, you could get a good boost by bringing it below 89.9% to take it out of maxed territory with an additional boost by crossing 86.9%. How much of a boost depends on your profile.