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Is down payment or credit score more important when applying for a loan?

Should I use some of my down payment savings to pay down my debt before I apply? Looking to get a 30 year loan for a $295k property. by rosalinda.z126 from Alameda, California. Aug 26th 2015 Reply


William J Acres (William_Acres)
#2 ranked lender in Arizona - 7,933 contributions

More info would be needed to properly answer your question. Typically, higher credit scores get better pricing and lower loan to value's get better pricing.. which is better for your scenario is hard to determine without looking at all your loan details.. The best advice I can give you is to contact a LOCAL mortgage broker and apply with them. Once they see your complete loan profile, they will be better equipped to advise you properly. Also, by applying with your LOCAL Broker, you have an advantage because he's familiar with local customs and works with many lenders with each one offering a different type of lending program. This is unlike the local bank which typically only has a few lending programs. The more lenders, the more lending options, and the more likely your scenario will be accepted.. Plus, the broker is experienced in seeking out the best loan terms for your particular scenario, and he has lower overhead which typically results in lower rates and fees than most of the larger lenders.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com NMLS# 226347

Aug 26th 2015
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Derick Condron (rightstartoregon)
#32 ranked lender in Oregon - 597 contributions

Will mostly depend on what your debt to income ratio looks like as well as how close to the next pricing adjustment tier your credit scores are. Typically a combination of paying debt down, using the money for a down payment and possible buying the rate down with discount points is the best bet.

Aug 26th 2015
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Mark Hemingway (SFSLend)
#1 ranked lender in Colorado - 569 contributions

That is a hard question to answer without first knowing what your current credit looks like. If you arre over 50% of your credit limit or even higher then that will affect your score. A mortgage broker can run a simulator on your credit and see how much you would have to pay down credit cards that you may have. Do not pay them off and do not close them. Conforming loans have increased some of their loan to value fees. So the amount of down payment can be important However, price adjustments are less if over 80%. Try and find a qualified mortgage broker that can properly analyze your credit. you will know once you start talking to a lender if that person has the knowledge to properly analyze your situation.

Aug 26th 2015
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Mel Smith (Voted.Best.Rates.and.Service)
#1 ranked lender in New York - 367 contributions

It depends, you could have a very high down payment, but if your credit score is really low, you may not even get approved. However, you could have a very high credit score with a low down payment, and get approved easy.

Aug 27th 2015
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Jason Bennett (jbennett)
#104 ranked lender in Pennsylvania - 67 contributions

Higher credit score opens the door to more programs. any score over 740 and you are in the top tier for all programs. some programs offer as little as zero down...but the less you put down will increase your payment based on rate adjustments for the program, PMI-upfront/monthly and potentially fees for the program chosen. If you have further questions and want to get a free prequel and in the northeast I will be happy to go over all the various programs at my disposal.email: jabennett2@mtb.com

Aug 27th 2015
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