When I was a lender, said all my minimum payments of everything and this is my monthly debt and then I talked my monthly income. So it does not matter the total amount of debt, but the monthly payment for each?
I'm asking this because I currently pay 566/month for my car payment of interest and for me to trade in another car, which is the same (maybe a bit less) than that per month.
Just a little confused . looking for a house to buy in next 6 months. Thanks.
Best Answer: You are confusing 2 separate issues. Debt to income ratios are figured by adding all of your minimum payments in a given month (credit cards, car payment, installment loans, anything that appears on a credit report) plus your mortgage payment inclusive of taxes and insurance and dividing by your gross monthly income(before taxes). This has no affect on your FICO(credit) scores. Part of your FICO score(30%) is affected by your debt to credit limit ratios. This is derived by adding all of your credit limits and dividing by the sum of all of your balances. However, individual accounts weigh just as heavily as the sum of all of your accounts. The rule of thumb is the 30-50-70 rule. Any time your account balance is over 50% of the credit limit on that particular account, it has a negative affect on your credit scores. Once you go over 70% of the credit limit, it reduces your credit scores even more. Once you "max-out" a credit card or, worse yet, go over your limit, the effect is huge. Conversly, it works in the opposite direction as well. Once you bring your balance below 50% of your credit limit, it starts increasing your FICO score. Bringing your balance below 30% of your credit limit raises your scores even more. Another mistake people make is that they think closing or not using a credit card helps them. This couldn't be farther from the truth. Closing a credit card that has been paid in full would increase your total debt to credit limit ratios and have a negative effect on your scores. Not using a card in several months would cause that account to be deemed inactive-regardless if the account is still open and thus hurt your scores and overall credit rating. Best rule of thumb is to use a card at least every 3 months and pay the bill once you receive the statement. As far as your looking to obtain a 38% debt to income ratio for the purpose of finding a mortgage-that's not necessarily true. Most conforming products, especially with full-documentation loans allow a debt to income ratio of up to 45%. Some lenders allow more in the sub-prime or Alt-A markets. Sounds like you need to find a mortgage broker that knows his/her industry to guide you through this. The first thing I do when a client approaches me to help them finance a home is to go over all of these things, helping them to have a solid understanding of exactly where they stand and what they qualify for.
Reply:I highly doubt that it would ruin your changes since you a re not making a new debt.
Reply:So getting a loan that leaves me with the same monthly payment wouldnt matter much 6 months before mortgage? I'm not incurring more monthly debt but staying the same. Thanks for the info!!!
Reply:minimum payments are all that is looked at to calculate debt to income.
remember, the minimum payment is a 'function of' the TOTAL debt.(ex: you wont have a $10 minimum payment on a credit card with a $10K balance)
so the banks just look at minimum monthly obligation because they know this coorelation exists
MyFICO score for Equifax is 715 (can not freeze because of a TU safety). Went to get to the Experian Vantage score and it is 776 (of 990). Here is me as strange: Experian says I have too many inquiries within the last year – I have one. MyFICO says my is positive with only one request. Experian said: “The average loan amount across open, reported recently real estate accounts, such as a mortgage is too low with low loan amounts has a negative impact on your credit score (ME).” What does this mea Continue reading
so that the original account MCM was nailed by the FDIC and ordered all kinds of crap . of which the refund or credit of certain fees.
MCM the ACA finally unveiled a letter from the account to the collection were . and voila . above
also see, in their little report generated from our $ 603, 588 cost . the same charges that have been ordered refunded
so was uhm, it's kind of interesting that I ran out of places happened
so never complain and ready . . what the heck, they d Continue reading
So a few months (5 I think) Chase decided to have my shitty shitty credit limit yet. $ 200 down from $ 900. My original thinking was screwed and had not used the card since. I was expecting it to be closed by now, but since I have not changed my mind! I will now see whether the change in my spending habits with the card to me any chance of a CLI them.
I being charged with my first in 5 months the other day, it is my plan to use the card several times a month for small not necessary purchase Continue reading
I'm confused here. I went to the Pontic dealership today for a new look GTO. The cost of the car is 34K. I filled out an application, and the sales rep told me my credit score was 560th For the record, I had a BK, who was released in May this year. He said that since the car will take 3-4 months to get, he would take 5k deposit for the car. Ok . this is not the problem, I expected before I went there. The seller asked me how much I could put on the car. Now I wanted on the implementation of Continue reading
(I think that should WFFNB not be “g”) Sorry!
It was an account I had was always punctual, never late. I joined it about six years before my credit card / money problems. I have released a bk 4 years and a few collections I will try to get out.
I a postive Car TRADELINE that now and not later than 4 total positive cc tradelines.
My TU is 660, Experian 620 and Equifax around 590th
Any experience always an old card like this again? I'd really like it for the story, becau Continue reading
Since my employer has nixed my transfer to another area of the country, I will in a house that I bought when we first moved left. My plan was the relocation has taken place, the house was to be used as rent. Since I interested in buying and renting homes have thought about my home would be one way to learn about the entire process. However, I have an LLC in which such property managed.
Part the incentive package provided to those who will remain in this area make a generous housing allowanc Continue reading
Time to Dump Your AmEx Card?
By Aleksandra Todorova
August 7, 2006
AMERICAN EXPRESS'S ANNOUNCEMENT last week that they would increase the fees on most of their Green and Gold charge cards — while reducing some popular membership rewards benefits like double points on everyday purchases — hasn't resulted in a rousing cheer from card holders.
"How do they expect to retain customers by diminishing the rewards program and raising fees?" ranted a poster on C Continue reading
For the last six months I have been waiting to use the car when my DH was home (he uses it all day at work so fall out of it is not possible). It is a big disadvantage because he works all day five or six days a week. I want to get a car loan and buy a reliable car to drive the kids around while DH is at work.
The problem is that we have an arm that should change this summer. I do not know whether or not we want to refinance. As a new car will affect the loan? Will it hurt our chances of r Continue reading
One of my CA called my attorney today, whom I retained last week. When he called the attorneys office the receptionist said that I had not retained them, which I have. So I immediatley called the attorneys office and she apologized and said that if he called back she would give him the information that I had indeed retained them and that she made a mistake. So I called the CA back and told the rep this and he said that he did not belive me and that he did his job and that the office needs to sen Continue reading