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pay off or not to pay off

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protectingtheus
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pay off or not to pay off  Reply with quote  

I am about to get a mortgage loan in a month. I have a no interest credit card that has a balance of 1900 with a small.payment due in a few days. I have plenty to pay it off and plenty to pt on the downpayment. I'm trying to determine if the entire 1900 is considered against my debt to income ratio or if it's just the minimum payment. I've seen online where the whole amount will count against me and elsewhere that it's just the min payment. I don't want to be turned down due to higher debt to income ratio. What do you think?
Post Sun Sep 16, 2012 11:35 am
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coaster
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Well, the answer is both of the above, but I don't think you really have to worry about a $1900 debt. It's better put toward the downpayment, anyway; that's money you're going to be paying interest on for a long time.

I trust you've checked your credit history and your credit score and they're fine?

~Tim~
Post Mon Sep 17, 2012 6:17 am
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soybean
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Re: pay off or not to pay off  Reply with quote  

quote:
Originally posted by protectingtheus
I'm trying to determine if the entire 1900 is considered against my debt to income ratio or if it's just the minimum payment.
The minimum payment is the relevant factor here. Now, since the way the minimum payment is calculated may vary by credit card provider, a lender might do their own calculation in some cases and use that figure instead of what the card card provider uses. For example, if a particular credit card only requires 1% of the outstanding balance as a minimum payment while 2% is used by most credit card providers, a prospective loan lender might use 2% on that one credit card instead of the 1%.
Post Fri Sep 21, 2012 6:31 pm
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cameronwhite
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Credit Cards and Loans is not a good thing. I suggest that salaries person don't avail this service even they have good salary package because at the end of the month your all salary will go in the shape of markup to bank.
Post Wed Sep 26, 2012 6:40 pm
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soybean
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quote:
Originally posted by cameronwhite
Credit Cards and Loans is not a good thing. I suggest that salaries person don't avail this service even they have good salary package because at the end of the month your all salary will go in the shape of markup to bank.
Rubbish. Credit cards are part of living in today's world; without them, you need to carry cash for everything and you are limiting yourself from being able to execute certain transactions such as online purchases. And, if you pay them off every month, you will never be letting "all salary will go in the shape of markup to bank"; in fact, the creditor gets no interest or fees from you if you pay the full balance every month on time. But, failing to use them wisely can cause big problems for those who fail to do so.
Post Wed Sep 26, 2012 6:59 pm
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littleroc02us
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quote:
Rubbish. Credit cards are part of living in today's world; without them, you need to carry cash for everything and you are limiting yourself from being able to execute certain transactions such as online purchases. And, if you pay them off every month, you will never be letting "all salary will go in the shape of markup to bank"; in fact, the creditor gets no interest or fees from you if you pay the full balance every month on time. But, failing to use them wisely can cause big problems for those who fail to do so.


Actually there really is no need for credit cards in the form of borrowing money vs. a debit/check card (Visa) for example unless you want a credit score. I don't carry a lot of cash except for certain items in my budget, but we use our Visa Debit card for purchases online, reserving hotel rooms and cars and for buying airplane tickets. So, no you don't need to use a credit card or carry cash, debit/check cards (Visa) do just about everything. IN fact the Zero Liability coverage is the same for Visa debit and credit cards so the fraud coverage is the same.

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Wed Sep 26, 2012 7:10 pm
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soybean
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quote:
Originally posted by littleroc02us
quote:
Rubbish. Credit cards are part of living in today's world; without them, you need to carry cash for everything and you are limiting yourself from being able to execute certain transactions such as online purchases. And, if you pay them off every month, you will never be letting "all salary will go in the shape of markup to bank"; in fact, the creditor gets no interest or fees from you if you pay the full balance every month on time. But, failing to use them wisely can cause big problems for those who fail to do so.


Actually there really is no need for credit cards in the form of borrowing money vs. a debit/check card (Visa) for example unless you want a credit score. I don't carry a lot of cash except for certain items in my budget, but we use our Visa Debit card for purchases online, reserving hotel rooms and cars and for buying airplane tickets. So, no you don't need to use a credit card or carry cash, debit/check cards (Visa) do just about everything. IN fact the Zero Liability coverage is the same for Visa debit and credit cards so the fraud coverage is the same.
Yep, I agree with you on using a debit/check card. So, if someone really beilieves they have no reason to build a credit rating, then using a a debit/check card is a way to avoid carrying cash. I frequently use a debit/check card for grocery and gas purchases. But, I also have credit cards and have a very solid credit score, which was a plus when I re-financed my mortgage about 6 months ago.
Post Wed Sep 26, 2012 7:17 pm
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littleroc02us
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Exactly, so the only way to have a credit score and to be a good candidate for banks to loan money to, is to borrow lots of money and pay it back. The FICO doesn't care if you have no debt, no credit score and don't borrow money but have a good income with the ability to pay back a loan and a high networth. Laughing

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Wed Sep 26, 2012 7:27 pm
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rsacs01
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Will you be able to get a lower interest rate on your mortgage if you put more money down (that's usually the case)? If so, you might opt for putting more money down.I don't know your income but Your CC debt doesn't appear to be that much. However, my gut instinct is to pay off your credit cards first. You are paying more for borrowing that money than you would with your mortgage. Besides, you can always make extra payments to your mortgage in the future.
Post Wed Sep 26, 2012 9:43 pm
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