MTG SCORE PLAN

[DGOATS1]

Ok. So I have read about possible thresholds being below 90% for installment loans having a positive effect on the MTG score and I also heard of getting the individual loan % under 8.9% helps.  I am going to list what my loans will look like in February 2020 and the biggest question is do I invest the cash of $7K in order to get all loans under 90% and have a few loans under 8.9%  Will it be worth the investment or throwing money away from our down payment/reserves.  Would appreciate any thoughts.  It will also depend on if we are at the 680 Middle come January.  Wife is not on the current mortgage.  The mortgage will be at 89% at time of application. 

WIFE:
1 cc:  under 8.9%

1 cc:  0

1 cc: 0

1 Student Loan.  Bal. 4576/27322 (17%) but if we pay $2145 it goes to 8.9%

ME:

Loan1	4900	20270	25%	$1,804	$3,100	8.9
	551	2410	23%	$215	$336	8.90%
	2025	17391	12%	$1,548	$477	8.90%
	37537	42054	90%	x 88.9%	$150	89%
	37357	40882	92%	x88.9%	$1,012	89%

So the question is do I invest and pay $5075 in the hopes of increasing the MTG Score for me?  Do I instead bring down everything below 90% and leave the rest alone?  bring down some of the very small balances to 1% to help overall utilization? 

Obviously if my wife's MTG Score is much greater than mine, I would not pay her's down and focus on my end and vice versa.

Thanks.

[Anonymous]

Mortgage scores take into account more than just your installment balances.

The heaviest factors are negative items like BK, collections, medical's, CO's and so on.

Getting installment balances under 90% obviously helps but, it's not really a significant change if there's something else holding your scores down.  If your overall CR looks good then your scores across all formulas follow suit.

What are you planning on 2/20 ?  New/Refi?  3%/5%/20% down?  If it's under 20% PMI or FHA comes into play.  FHA is a lessor issue than PMI for the best rates on the premiums.

[DGOATS1]

Just looking for any other tricks to help.
Going to need conforming 10% down due to Fha limits

[Anonymous]

So, 10% down and PMI for the other 10%.  You're really going to want to get over 720 for a middle score for the best premium on the PMI side.  The last mortgage I did mentioned the minimum is a 700 for PMI... the market's always changing but, things like PMI don't change much.  Check with your broker on what the requirements are. 

You listed 5 loans in your OP but, what are they?  Car? Mortgage? Personal? Student?

Do you have any CC's in your name?

I'm more of a fan of keeping cash reserves over paying down a loan.  Though when they calculate your DTI they factor in all of the minimum payments and deduct that from the total amount you can borrow to make the mortgage payment fall into the paramaters for DU to approve the loan before passing it to UW for final approval and stipulations.

[DGOATS1]

I’m more concerned about LLPA which is huge below 680 and the pmi I will destroy with extra payments and get removed real quick.

Have 3 open cc and will have under 8.9 azeo
All loans are student loans listed
Have mortgage now
I don’t know where I will stand until after I pay off my last CO stud loan in July.
Have a car loan that will be paid off soon too.

I just wanted to get intel on any final algorithm tricks at the end.

Looking for 500k or less for home so all my estimates are 450k loan with 50k down.

I didn’t get into it yet but I don’t know if 401k pension and restricted stocks can be used for reserves. Or what # months would be required. This is more for the mtg forum so here in this thread I am just looking for any thresholds because there is not a lot of data out there on mtg scores compares to Fico 8

[Anonymous]

Sounds like everything will be in place and you've sorted out most of the details already.

The more liabilities you can knock out the better for moving forward to applying.

Factoring in the SL's and a balance to origination... the point gain is minimal for hitting the different brackets.  Obviously you get a  point boost from having an ":installment" loan but, it's also not that much.  If you can get the CO removed by calling the CRA's and asking for an early exclusion it could be a 50-75 point pop in scores if that's the only negative sitting there.  And then the rest is just normal payments and not worrying so much about it in the big scheme of things.

Reserves aren't really a requirement but, it looks and feels good knowing you have 3-6 months of PITI in place if something happens you don't have to scramble as quickly into something that's not a great fit just to keep the lights on and mortgage paid.  The 401K / Restricted stocks play into how the UW looks at the bigger picture beyond your liquid assets and income.  

[DGOATS1]

Thanks, yes this forum and mtg forum have been key for me. I am easily in the DTI range per the calculators online to get the loan, which is why I struggle now because I know the only game to play is down payment money and extra savings after closing vs. possible increase in score that may or may not happen or even be with it.

I may bite the bullet after my new Amex 3x increase hits the reports and just pull another 3b to see where I stand pre payoff of the charge off. Also have a closed cc that will be paid I think in August per my budget. Can’t remember. My last mtg score was April and a lot has changed again with my revolving utilization.

Do you have intel of any 90% threshold for mtg scores or if overall installment utilization is a factor? I read that it was but can’t find the link searching.

[Anonymous]

Not on the mortgage side.  I did pay off my car though and the only impact from losing that loan was 6 points on EX.  I do have a mortgage reporting so, still have that installment loan factoring in.  So, on a FICO 8 it's minimal.  Someone might come along though and chime in eventually.  

https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Installment-loan-utilization-in-mortgage...

https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Installment-utilization-rates/td-p/11894...

https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Installment-loan-payoff-or-reduce-cc-uti...

https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Any-data-points-on-installment-loan-lt-7...

https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Ideal-utilization-for-installment-loan/t...

Anecdotaly it doesn't appear to be significant until you hit under 8.9% for mortgage scores.

[SouthJamaica]

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@DGOATS1 wrote:

Ok. So I have read about possible thresholds being below 90% for installment loans having a positive effect on the MTG score and I also heard of getting the individual loan % under 8.9% helps.  I am going to list what my loans will look like in February 2020 and the biggest question is do I invest the cash of $7K in order to get all loans under 90% and have a few loans under 8.9%  Will it be worth the investment or throwing money away from our down payment/reserves.  Would appreciate any thoughts.  It will also depend on if we are at the 680 Middle come January.  Wife is not on the current mortgage.  The mortgage will be at 89% at time of application. 

WIFE:
1 cc:  under 8.9%

1 cc:  0

1 cc: 0

1 Student Loan.  Bal. 4576/27322 (17%) but if we pay $2145 it goes to 8.9%

ME:

Loan1	4900	20270	25%	$1,804	$3,100	8.9
	551	2410	23%	$215	$336	8.90%
	2025	17391	12%	$1,548	$477	8.90%
	37537	42054	90%	x 88.9%	$150	89%
	37357	40882	92%	x88.9%	$1,012	89%

So the question is do I invest and pay $5075 in the hopes of increasing the MTG Score for me?  Do I instead bring down everything below 90% and leave the rest alone?  bring down some of the very small balances to 1% to help overall utilization? 

Obviously if my wife's MTG Score is much greater than mine, I would not pay her's down and focus on my end and vice versa.

Thanks.

---

Sorry but you are saying a lot of misinformation.,

1. Installment utilization percentage has little or no effect on your mortgage scores.

2. Installment utilization percentage of 8.9% is of no significance to your FICO 8 scores; FICO 8 scores are affected by overall installment utilization,  not individual loan utilization.

3. The best things you can do for your mortgage scores are (A) not apply for any new credit and (B) maintain as many zero balances as possible in your revolving balances. Optimum is for all but one to report zero.

4. Any money you have to throw at something should be thrown at your revolving accounts, not your installment loans.