I want to buy a house...?

Question

What do i need to check first with my credit? Is paying off my credit cards good to raise the score? help =) thanx

Answer 1

As far as credit is concerned in mortgage lending, the lender will want to see a few things:
1) They do not want to see any open collections or judgments
2) They would want a score of at least 620 (if you want a decent rate)
3) They will check your debt-to-income ratio (how much you pay per month in CC and loan bills in prooprtion to your income)
4) If you've filed bankruptcy, they will want to see it discharged for at least 2 years with reestablished credit
5) For the established credit that you have, they will want to know that you've made on-time payments for the last 12 months

Just paying off your credit card bills is not going to automatically raise your scores. It will bring down your debt ratio and that's a good thing.

I hope that helps and good luck!

Answer 2

First you want to go to: https://www.annualcreditreport.com/cra/index.jsp

For free, everyone citizen is allowed to get a credit report from the three reporting companies each year. If you find errors, fix them. Pay off the credit cards if able.
If everything on the report looks accurate and good then go to a lending institution: bank, credit union, mortgage company. Have them pre-approve you so you know how much you qualify for and get you credit score. You want to do all this before looking at house because you could be wasting everyones' time if you don't qualify for much. After that, look at houses where the payments would be 25% or less of your take home pay on a 15 year fix mortgage. That leaves you money for life, expenses, retirement savings, etc....
On a side note, always get the house you plan to buy inspected well. Surprises can be costly.

Answer 3

The SCORE! 620 or higher is what you need to get a conforming loan with a good rate. The next thing is your debt to income ratio. How much going out VS income gross. Fannie Mae etc want the debt ratio with your new homes monthly expenses of principal interest taxes and insurances to be no higher than 45%. prefer 38 total dti. Then same work for a least 2 years with savings in the bank or retirement accounts as well plus any down payment and closing cost needed.
I am a mortgage banker in TN & KY

Answer 4

paying something in full is always good. It could still take a while for your credit score to go up. But banks also look at your debt to income ratio including how much you pay for groceries, entertainment and such, also how close you are to bankruptcy.

Answer 5

check out this site, it might help you.http://cgi.money.cnn.com/tools/houseafford/houseafford.html