Managing Installment Loans before Mortgage

Credit and mortgage advice Forums Home Mortgage Managing Installment Loans before Mortgage

Viewing 0 reply threads


  • Author
    Posts
    • #233614
      Anonymous
      Inactive

      I am still about 2 years away from applying for a mortgage, but I want to ensure my score stays in tip-top shape when the time comes.*

      *

      I currently have 5 open credit cards, AAoA is ~3.5 years and they are all paid in full each month. *I don’t optimize payments, but the utilization stays below 15% each month. *As I draw near to actually applying for a mortgage, I’ll play the ideal utilization game.

      *

      I have one installment loan- A student Loan since 2006, sitting at a $7000 (orig. amt was $14000) balance and a 3.75% APR. *My monthly payment is $112. *I could pay it off now, but I want to make sure I do what’s best for keeping my score up.

      *

      Option 1: Pay it off now. *If I do this and wait 2 years for a mortgage, will my score suffer from a lack of credit mix?

      *

      Option 2: Change nothing. *Is this a good approach? Theoretically the balance will be closer to $5000 by the time I apply.

      *

      Option 3: Pay off the loan right before I apply for the mortgage. *Will this keep my score up for having the credit mix?

      *

      Option 4: Pay down the loan so there is a really small balance when I apply. *Is this any better/worse?

      *

      I’m most likely going to just keep paying as agreed for now, but if there’s an ideal way to handle this, I’d like to know well in advance.

      *

      Thank you!



Viewing 0 reply threads
  • You must be logged in to reply to this topic.
Register New Account
Reset Password