Posted on: 28th Aug, 2009 09:50 am
I plan to apply for a home mortgage soon and have several credit accounts. I can pay off the balances but have heard in the past that paying them all off could actually hurt my score.Is this true? Should I keep balances?
paying off your balances is in your favor, as it will reduce your debt level. what you want to avoid is closing those accounts. having credit lines available is a favorable thing, so if you have a $500 limit and $0 balance, that's a wonderful thing. if you have a $0 balance and a higher limit, so much the better.
your affordability scale will increase with less debt.
your affordability scale will increase with less debt.
George is correct. In addition, you need to be careful that you do not pay off so much debt that you no longer have any other liquid assets. The balance between the two must be managed just prior to applying for a loan. Speak to a qualified loan professional
yes. paying off will reduce your liabilty & improve debt to income ratio which is one of the key factor for FHA loan.
eric is right. you should always have some liquid amount. you need to make 3.5% downpayment for fha loan. so takecare of it as well
eric is right. you should always have some liquid amount. you need to make 3.5% downpayment for fha loan. so takecare of it as well
ditto, ditto, ditto...and so it goes
good information