What is better strategy for obtaining home mortgage?
smartymoneys asked:
I use a credit card to pay for everything during the month. I then pay it all off at end of month. Would a mortgage lender consider this a monthly credit payment amount and offer less of a mortgage than if I were to just pay everything with check and cash and have no credit payments to make? What should I be doing to get the most mortgage amount approved?
I use a credit card to pay for everything during the month. I then pay it all off at end of month. Would a mortgage lender consider this a monthly credit payment amount and offer less of a mortgage than if I were to just pay everything with check and cash and have no credit payments to make? What should I be doing to get the most mortgage amount approved?
June 25th, 2011 at 2:19 am
Doesn’t matter. Lender is most interested in credit score, income, and job standing as far as an approved loan amount. If you get a jumbo mortgage (over $415k) your rate will automatically be higher. Be careful not to go outside of your means,,,that’s what many did and caused most of this economic downturn. And always, always, always, get a FIXED rate loan.
June 26th, 2011 at 10:41 am
The latest I learned is that using your credit card and paying it off each month makes your a non-productive customer, causing your to be in a special list, which makes your credit score to drop. I don’t know how true this is, but it is disturbing, considering the economic situation. Kudos to your for being such a responsible customer. However, if I were you, I won’t use my credit card at all. What you do seems to me like an exercise in futility.
June 29th, 2011 at 12:17 pm
hi smarty
it all depends on how much u want to burrow,how much u earn,& how much interest u are paying on your credit card.u would be better off seing a good financial advisor,to see what u are in for financially, & see wheather these lenders will lend u the money.we have borrowed a heap of money,if u don’t ask they don’t lend.
cheers
kirrakid
oz
June 29th, 2011 at 3:27 pm
No. When they pull your credit the amount shown on your credit card will be considered a debt and lower your debt-to-income ratio. You can clear this through the mortgage underwriter by providing them with a statement showing that it has been paid. But right now I would not charge more than half of the credit card balance (i.e. if it has a credit line of $5,000 don’t charge more than $2,499 because lenders don’t like to see cards over 50% the balance and it will effect your FICO (credit score).
June 30th, 2011 at 9:12 pm
Many things:
1.Have 3 credit reports from Experian, TransUnion and Equifax.
2.Shop for rates from different lenders or brokers.
3.Get GOOD FAITH ESTIMATES from the lenders or brokers
4.Compare offers:downpayment, closing costs, lender’s fees, interest rate…..
5.Ask yourself this question: how long am I going to live in that house. If the answer is less that 7 yrs, go for an adjustable mortgage rate. If you are buying for the long haul, go for a fixed rate
6.Ask friends who are already homeowners which bank or mortgage company they would recommend and why
7.Lower your other debts, so that the lender realises you don’t have too many other creditors.
8.You gotta have to document your income, b/c it’s hard to get a loan these days with undocumted income