Property Manager · Menlo Park, CA · Member since 2019 · 7 posts · 1 vote
Hi everyone 👋🏻
I have been working on my personal finances lately, and I have consolidated some credit card debt within the past couple months. I still have two credit cards pending that’s scheduled to be paid off at the end of March. With what I’ve paid off so far, I was hoping my credit score would Sky rocket, but sadly the increase to my credit score was subtle. (+21 points)
Would it be best to have a credit score at 800+ with a low debt to income ratio and apply for a FHA loan OR apply for a FHA loan with my credit score as is and still have a low debt to income ratio (I still plan to pay off the last two credit cards) Also, my current credit score is in the early 700's.
I am looking to make a purchase for my first income property within the year (by January) either long distance or within Sacramento, CA.
I have been working on my personal finances lately, and I have consolidated some credit card debt within the past couple months. I still have two credit cards pending that’s scheduled to be paid off at the end of March. With what I’ve paid off so far, I was hoping my credit score would Sky rocket, but sadly the increase to my credit score was subtle. (+21 points)
Would it be best to have a credit score at 800+ with a low debt to income ratio and apply for a FHA loan OR apply for a FHA loan with my credit score as is and still have a low debt to income ratio (I still plan to pay off the last two credit cards) Also, my current credit score is in the early 700's.
I am looking to make a purchase for my first income property within the year (by January) either long distance or within Sacramento, CA.
Thank you all in advance!
Ana, if your DTI ratio is within tolerance and you are applying for an FHA loan then I would take action now. First, I would talk to your lender and see if you currently qualify for the lowest interest rate. Try not to have them pull your credit, if at all possible.
Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
6y
@Ana Masifilo I would not wait to start investing if your score is in the 700's. Rates are at an all time low, so while you could get a slightly better rate in the future with a perfect credit score, it is unlikely to make that big of a difference. I tell my clients here in Chicago all the time that it normally makes sense to just get started, especially if you can house hack. House hacking is one of the biggest cheat codes available to the average American today.
I have been working on my personal finances lately, and I have consolidated some credit card debt within the past couple months. I still have two credit cards pending that’s scheduled to be paid off at the end of March. With what I’ve paid off so far, I was hoping my credit score would Sky rocket, but sadly the increase to my credit score was subtle. (+21 points)
Would it be best to have a credit score at 800+ with a low debt to income ratio and apply for a FHA loan OR apply for a FHA loan with my credit score as is and still have a low debt to income ratio (I still plan to pay off the last two credit cards) Also, my current credit score is in the early 700's.
I am looking to make a purchase for my first income property within the year (by January) either long distance or within Sacramento, CA.
Thank you all in advance!
Ana, if your DTI ratio is within tolerance and you are applying for an FHA loan then I would take action now. First, I would talk to your lender and see if you currently qualify for the lowest interest rate. Try not to have them pull your credit, if at all possible.
Property Manager · Menlo Park, CA · Member since 2019 · 7 posts · 1 vote
6y
@John Warren Thank you for your input John, that gives me some motivation to pull the trigger. I am currently house hacking now as part of my base salary as a property manager within the Bay Area — & let me say, I am very fortunate to have discovered house hacking this early on.
Property Manager · Menlo Park, CA · Member since 2019 · 7 posts · 1 vote
6y
@Derek Harris Thank you Derek for your insight, I’ll definitely see if that would be an option. My DYI is definitely tolerable, I appreciate your feedback!
Rental Property Investor · Phoenix, AZ · Member since 2020 · 11 posts · 6 votes
6y
Hey Ana,
I just got off the phone with a friend of mine who owns his own mortgage company. He said with rates being at historic lows that credit scores in the 700s are getting the best rates. He advised me not to wait either as it is a great time to buy and lock in a low APR. If you can qualify with a low DTI and high credit score your terms as well as your total loan amount will be at a great level. I'd advise going to your bank where you have accounts and asking them these questions to get hard answers for your area.
Rental Property Investor · Erie, PA · Member since 2015 · 1k+ posts · 2k+ votes
6y
A credit score in the 700s is more than enough. As long as your work income is sufficient I see no issue in you not getting a FHA loan at a good interest rate.
You can go to a mortgage company or bank and get prequalified for a loan. It's a pretty simple process, especially if you work a 9-5 job for a company (being self-employed like I am meant more paperwork when it came to getting a FHA-loan).
With a prequalification letter in-hand a realtor will know you're quite serious about buying and you can begin the process to purchasing your first investment property.
I have been working on my personal finances lately, and I have consolidated some credit card debt within the past couple months. I still have two credit cards pending that’s scheduled to be paid off at the end of March. With what I’ve paid off so far, I was hoping my credit score would Sky rocket, but sadly the increase to my credit score was subtle. (+21 points)
Would it be best to have a credit score at 800+ with a low debt to income ratio and apply for a FHA loan OR apply for a FHA loan with my credit score as is and still have a low debt to income ratio (I still plan to pay off the last two credit cards) Also, my current credit score is in the early 700's.
I am looking to make a purchase for my first income property within the year (by January) either long distance or within Sacramento, CA.
Thank you all in advance!
Within the past few months, I've had clients close on properties for themselves and as investments whose credit scores were horrible. So no, It would not be best to wait until your credit score is 800+. While your working on getting your credit score to 800+ get in the game and start looking for your first investment.