Hey all... I know this may be sorta off topic, but it's a question that I've been wrangling w/ for some time, and I know there's some experts out there who can help... Is it better to have lower CC balances (i.e. lower utilization) or cash on-hand when in the pre-approval phase of a mortgage? Currently, we're at about 30-40% utilization (a total of approx. $7k). We were wondering if we should pay down some cards first or just keep paying them (more than the minimum) each month, to keep the cash on hand? Thanks in advance.... DB
DB: great questions and all to many borrowers do not take into consideration. it all depends on your DTI's debt to income ratios this is going to determine how much of a house you can afford your back ratios are the biggest concern as it takes into account all of your monthly payments on any consumer debt and also includes the new payment of the mortgage including your taxes and insurance on a monthly basis. Are you planning on putting anything down on this new found house? is it a subprime or prime loan? are you borrowing 100% LTV one loan or an 80/15 combo? These are also valuable questions in order to better determine the answers to your questions. hope everything goes great in the process of getting your new digs. BB AHMCC
