We are trying to get approved for a mortgage and have a credit score that falls too low. We also need to worry about a debt-to-income ratio, and of
course getting the best rate down the line.
We have two credit cards (limites of $12000 and $23000) that are near their limits and other, smaller limit cards ($5k, $8k, $5k) that have balances at/slightly below 50% of their limits. Should we throw the disposable $10000 or so we have at the ones closer to the limits (in order to reduce at least one to 50%)? Or should we pay off the smaller revolving accounts to $0.
I know we should not close any accounts.
Albert,
What is your credit score? You want to make sure that paying down cards at least gives you a shot at improving them to a level where you can qualify for a mortgage. If you are not close, you should follow the advice from Benito, but if you have a shot, reduce as many cards to 29.99% of their limit as possible.
Hi Albert, you have an idea, but financially the ones with the highest interest should be pay first.
If one of the credit card is at 6% an another at 14%, pay the one at 14%. Remember that interest its something yu lose because of the use of the finance, it is not a product itself.
But, also, another idea could be to pay the smaller ones and then star paying the large ones.
Eitherway you need to star payign off your debt. Always pay more than the minimun payment. The more you pay , the better.
Holidays are just around the corner but you want to buy a home, so get your plan to do it.
Do not apply for more credit, magane your current credit cards.
Look for a Non profit or at your county for a First Time Home buyer program.
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Fair Housing and Equal Opportunity