Home buying financial question

[becca]

So I am in process of buying new home closing next week. I have question about credit cards. I know you should not buy new debt. Lol

I don’t really carry credit card debt anymore. I learned my lesson. I will use my cards sometimes. For example I use my Amazon card for amazon for points but I have literally set on automatic deposit to pay in full every month.

So I am wondering can I get hurt by cards that have zero balance because they were reported differently mid cycle. To point out I no where near hit a high credit utilization. If anything my cards keep on automatically increasing my limit because I don’t.

 

[AxelAnnie]

So I am in process of buying new home closing next week. I have question about credit cards. I know you should not buy new debt. Lol

I don’t really carry credit card debt anymore. I learned my lesson. I will use my cards sometimes. For example I use my Amazon card for amazon for points but I have literally set on automatic deposit to pay in full every month.

So I am wondering can I get hurt by cards that have zero balance because they were reported differently mid cycle. To point out I no where near hit a high credit utilization. If anything my cards keep on automatically increasing my limit because I don’t.

Yes. Next to buy something and pay it off next month. In fact when you use the card write a check right then and send it when payment is due

 

[becca]

Yes. Next to buy something and pay it off next month. In fact when you use the card write a check right then and send it when payment is due

That’s what I do but sometimes credit card company still reports it.

 

[Deleted member 1204]

If your balances are small and you pay them off regularly, it shows that you use credit responsibly. I wouldn't worry about it.

 

[AxelAnnie]

That’s what I do but sometimes credit card company still reports it.

Sure they report it...but as a plus.

 

[Aceon6]

So I am wondering can I get hurt by cards that have zero balance because they were reported differently mid cycle. To point out I no where near hit a high credit utilization. If anything my cards keep on automatically increasing my limit because I don’t.

Having a lot of credit and not using it actually INCREASES your credit score. There’s a good explanation here. Assuming all your other factors are good, a low utilization rate is the thing that pushes you into the 800s and gets you the best interest rates.

 

[becca]

Having a lot of credit and not using it actually INCREASES your credit score. There’s a good explanation here. Assuming all your other factors are good, a low utilization rate is the thing that pushes you into the 800s and gets you the best interest rates.

True I guess concerned the small balances might effect me. Because I notice things I already paid because reporting day a month old. Lol. But even with that my credit utilization is at five percent.Lol

 

[Debbie S]

As long as your credit utilization stays under 10%, you're fine.

 

[becca]

As long as your credit utilization stays under 10%, you're fine.

Yes.

 

[Aceon6]

True I guess concerned the small balances might effect me. Because I notice things I already paid because reporting day a month old. Lol. But even with that my credit utilization is at five percent.Lol

It’s better to have small balances than none. A utilization of 0% does NOT increase your FICO score. And don’t cancel cards, especially the ones you’ve had longest. If you no longer like the card, just put it away.

 

[Deleted member 1204]

my credit utilization is at five percent

The effect won't negatively affect your credit.

 

[meggonzo]

Are you asking because you are concerned that it will affect the interest rate on your loan? If you are closing next week, wouldn't you already have that locked in?

 

[becca]

Are you asking because you are concerned that it will affect the interest rate on your loan? If you are closing next week, wouldn't you already have that locked in?

just concerned having any balance at all affect debt Level. Although most showed was old balanced I already paid.

 

[becca]

Well house went through! Yeah now I just spent over 3k on major appliances needed new fridge, stove dishwasher. Decided to take zero percent interest and not spend all my cash on it but it sucks until two days ago the only debt I had was car payment and student loan.

 

[Aceon6]

Breathe, @becca , breathe. It’s going to take several months to adjust. Just take it easy on discretionary spending until the shock wears off.

 

[Deleted member 1204]

Why did you decide to buy a house in the first place if the debt is stressing you out?

 

[Aceon6]

Why did you decide to buy a house in the first place if the debt is stressing you out?

@mikey Not @becca , but that comes across a bit strong. One can look at and understand a set of numbers and know, for sure, that it’s doable. Still, the emotional “Oh sh!t. What did I do?” is fairly common among first time homeowners. That’s why I suggested that it might take several months before that feeling goes away.

 

[becca]

Why did you decide to buy a house in the first place if the debt is stressing you out?

Because our apartment complex was going downhill the cost to move to another apartment pay almost what paying mortgages and taxes. Rent is skyrocketing as is costs for houses. I would have preferred to wait a year. Because I think year two years I have a good shot at getting promoted a second time.
But then moving twice. And well I may end up paying way more for house then.
So since I found a decent house at an affordable price in a good neighborhood decided should bite bullet.

 

[Aussie Willy]

I had an issue with a bank because I had a credit card that had a $6K limit, even though I had only $1,000 on it. The bank assumed what could have been spent on the card, not what had been spent on it in judging whether I could have serviced the loan or not.

This happened when I was having issues because as I was in the process of buying my property, the mortgage broker I was using were screwing up big time (blame young Jessica who subsequently lost her job over it). I contacted another bank who I had been with for years (not the one I was getting the mortgage with and was having no problems). I had at least 40% of the deposit and then had also had a mortgage previously for 7 years and two investment properties. I was actually want to borrow less than my previous mortgage. But in Australia the banks have clamped down on lending because they go slammed in a royal commission here.

Anyway just being a devil's advocate on this. It shouldn't matter but banks/lenders can be bastards sometimes. I wouldn't trust them until I actually had the approval.

 

[becca]

I had an issue with a bank because I had a credit card that had a $6K limit, even though I had only $1,000 on it. The bank assumed what could have been spent on the card, not what had been spent on it in judging whether I could have serviced the loan or not.

This happened when I was having issues because as I was in the process of buying my property, the mortgage broker I was using were screwing up big time (blame young Jessica who subsequently lost her job over it). I contacted another bank who I had been with for years (not the one I was getting the mortgage with and was having no problems). I had at least 40% of the deposit and then had also had a mortgage previously for 7 years and two investment properties. I was actually want to borrow less than my previous mortgage. But in Australia the banks have clamped down on lending because they go slammed in a royal commission here.

Anyway just being a devil's advocate on this. It shouldn't matter but banks/lenders can be bastards sometimes. I wouldn't trust them until I actually had the approval.

Well I am currently sitting in my house right now so I didn’t purchase appliances till then. In general I have learned my lesson with credit cards pay them off before they collect interest I did finance my appliances but at zero percent. And I do have the money to pay cash if need be.

 

[Peaches LaTour]

Congrats to you for buying a home! May it shelter you in joy for many years to come.