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Your Advice Is Greatly Needed Getting Ready To Purchase 2nd Home


Lil Smurfette
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DH and I are in the process of purchasing our 2nd home. We have a family of six with three teenage children and one toddler and are currently living in a 1600 sq ft 4 bdrm home. We are wanting to purchase a new 5 bedroom home, hoping to get into contract by September and move in the beginning of the year. Credit scores are currently 668, 638 and 628 due to utilization.

We just did some much needed repairs to our existing home and charged most of the materials on our credit card, but have since gotten a HELOC from USAA, so we do have the money to pay them down. We have two car loans one that will be paid in about 18 months (both have 5% interest rates).

Just a few months ago high CL was around 750, middle 693 and low 675. How much should we pay the credit cards down too, to bring our credit scores back up. And should we go ahead and either pay off the car loan or just pay it down to 10 months?

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I would suggest that you keep your car loan active as that will continue to increast your scores.

You will see improvement with 10% utilization of your credit cards.

The possible problem I see is that you need to make sure that your HELOC is being reported by USAA as a mortgage and not as a trade line. If it is a tradeline you may be at a high utilization of that account and it will hurt your scores.

Charles

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First Source, what interest rate do you think that we will qualify for with middle scores around 630? Homes in California are very expensive, do you know of any good loan programs to keep payments right around $2500.00 a month. We would like to put as less down as possible, so that we can have some funds to fall back on in case the individuals that were going to be renting our current house to is slow paying, defaults, etc...............

We are looking at homes anywhere from $450,000 - $500,000.

*Also, as always thanks for your advice and expedient response.

The payments on are two car loans are 395.00 and 420.00 and you don't think that we should pay at least one off right. This should not prevent us from purchasing? Note - we will be going stated income..................Which only requires a credit score of 580 right?

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