Financing in 15001>Question Details

Uacc2006, Home Buyer in 15001

Do Mortgage lenders require you pay down and/or close credit cards when applying for a mortgage? I'm a first time buyer.

Asked by Uacc2006, 15001 Mon Apr 18, 2011

I have no derogatory credit. Just high revolving balances. my average Fico score is 670.

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It depends on your overall debt picture. If the balances and payments are too high it may be throwing off your Debt to Income ratio and preventing you from qualifying. In general though, the answer would be that it is not a typical requirement. I have been helping first time buyers get approved for 16 years. Feel free to call me 412 567 6560 to review your situation in more detail.
1 vote Thank Flag Link Mon Apr 18, 2011
Gregorio, If you'd like to refer all PA buyers to me that would be great:)
0 votes Thank Flag Link Mon Apr 18, 2011
Absolutely not.
Do NOT close your credit cards, especially when buying a house. Closing your credit card accounts will cause your score to drop.
Regarding paying down balances; you need to follow the direction of the loan officer you are working with. In some situations it may be warranted to pay a balance down to achieve a specific goal, but in general you should not do this on your own.

Find a good loan officer in PA to assist you: if you would like a referral, please contact me.
Web Reference: http://TripointMortgage.Net
0 votes Thank Flag Link Mon Apr 18, 2011
Hi Uacc2006--
If your score is 670 and you are looking for an FHA loan your score is fine. If you are looking to get a conventional loan you'll want to get that score to at least 680 ASAP. I can work with you on how to do that if you'd like. Paying down credit cards will lower your monthly expeditures but you may want to save your money for the house instead of paying the credit cards down. It all depends on if your debt ratio (monthly debts divided by monthly income) require you to pay down credit cards or not. A side note: closing cards actually hurts your score a little bit (not much). It's better to keep your cards open with a zero balance because one of the factors that goes into your score is the "credit used" vs. "credit available" ratio. You want to keep the "available" as-is but paying down your credit cards can help your score as well as your affordablity (debt) ratio. I'd be happy to pre approve you if you don't already have a lender that is knowledgeable and that you trust.. Always feel free to call or e-mail. Good luck!
Chad 610-622-2212
0 votes Thank Flag Link Mon Apr 18, 2011
A lender cannot require you to do anything like that. However a good lender will offer such moves to increase your borrowing potenital or get you a better rate.
Benny Smith 412-498-7868
0 votes Thank Flag Link Mon Apr 18, 2011
Hi Uacc,

I understand what you're asking, but let me try and answer it this way. Mortgage lenders want to see a good dept to income ratio. So if your income is high enough to support a mortgage and the other debt there would be no need to pay the other debt down. Granted I am not a mortgage lender, but if you'd like to call one I can provide you with a number which you can ask direct questions without committing yourself to a mortgage.

Hope this helps
0 votes Thank Flag Link Mon Apr 18, 2011
Hi There -Every lender is different & mortgage amounts they are willing to lend will depend on your FICO score. Most likely you would not want to close out any credit cards as this can have a negative impact on your overall credit. Call a few local lenders, pick one you like & they will be able to walk you through the steps of applying for a mortgage & give you the best way to get your credit where they need it to be.
The Marie Souza Team - Top Selling on Cape Cod
Phone: 508-790-2000 Fax: 508-790-4005
Web Reference:
0 votes Thank Flag Link Mon Apr 18, 2011
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