Since you will be utilizing less of your available credit and lowering your credit utilization, paying off your credit card debt can improve your credit score (which accounts for about a third of your credit score).
Lenders can notice that you have more money available from your income to pay your mortgage. It's not necessarily necessary to have a perfect score, though, to get a favorable interest rate.
If you have a strong credit score (at least 670) and meet the requirements for a private mortgage loan (an FHA loan requires a fair credit score of 580), you can typically purchase a "point" for an additional 1% of the loan amount to lower the interest rate from, say, 5% to 4%. That might turn out to be a wise investment in the long run.
Holding onto your mortgage for a few years, allowing equity to grow, and then refinancing to a cheaper rate is an alternative. As the price of real estate could decrease, mortgage rates could increase, or both, this can be a riskier option.
As credit card debt is expensive, it should be the first item on your list of debts to pay off. Yet as long as your DTI % is low enough and you have high to excellent credit, buying a property straight immediately won't necessarily be a barrier to loan approval.
Lenders can notice that you have more money available from your income to pay your mortgage. It's not necessarily necessary to have a perfect score, though, to get a favorable interest rate.
If you have a strong credit score (at least 670) and meet the requirements for a private mortgage loan (an FHA loan requires a fair credit score of 580), you can typically purchase a "point" for an additional 1% of the loan amount to lower the interest rate from, say, 5% to 4%. That might turn out to be a wise investment in the long run.
Holding onto your mortgage for a few years, allowing equity to grow, and then refinancing to a cheaper rate is an alternative. As the price of real estate could decrease, mortgage rates could increase, or both, this can be a riskier option.
As credit card debt is expensive, it should be the first item on your list of debts to pay off. Yet as long as your DTI % is low enough and you have high to excellent credit, buying a property straight immediately won't necessarily be a barrier to loan approval.
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Credit Card