I have a credit score above 700 (around 720). The only debt I have is a small student loan payment and a car payment which has less than 1 year left on the loan. And I pay off in full credit card transactions every month so I don’t carry a balance. I have the money to payoff the car note. If I did that, would it possibly get me a better mortgage rate? I have done the debt ratio calculators and it shows I have about a 16% ratio and paying off the car would lower that to virtually nothing. I was preapproved for a mortgage last year with the same debt as now (although the car note was higher then) and I was preapproved for a loan.
Home I’m interested in qualifying for USDA rural housing. Thought about putting down 3% similiar to amount needed for FHA loan and finance the rest.
Mortgage Loan & Debts?
4 Responses to Mortgage Loan & Debts?
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No it is your credit score that determines the rate you get. Just shop around for the Best Deal.
Your range is 3.8% to 5% The larger the down payment also helps
Do not pay off the car loan but keep the cash to increase your down payment.
It might help a little. Mortgage rates for you should be around the 4.5% range right now. If you aren’t getting that, you should look somewhere else.
Keep making payments. Payments leave a good ‘ting’ to your credit report.. it shows a GREAT history of paying on time. If you pay off the car loan.. yes it’s nice to have it paid off but you will stop getting those credit points for paying on time if your fulfill the loan.. It’s like a credit card. It is Always good to charge money here and there (even if just $1 a month!) and pay off the balance each month than it is to cancel or carry no balance on a credit card.
- I used to do loans and looked through credit reports everyday to approve or not approve them.
Since you are interested in improving your score and wanting to buy a home, I would have to say that you need to checkout this guide. This is not to discourage you but more to prepare you for the future of buying and having a mortgage. When you get a chance please take a look at http://www.foreclosureworkoutguide.com . I wish you must success with your endeavors as well.