Should I pay off my debt before buying a home with bad credit?

Cliffco Mortgage Bankers, Long Island - Phone: 516-408-7300

A common strategy to improve a less-than-optimum credit score is to pay off debt to improve the debt-to-income (DTI) ratio and credit utilization score. But is this the first thing to do? Here is Cliffco Mortgage Bankers' answer to a question we often hear from clients.

Whenever thinking about paying anything off, you should always consult your loan officer in order to get a fully worked up answer.

Just paying off debt might not be the answer to fixing your ‘bad’ credit. As loan officers, our job is to consult clients on a broad spectrum, credit being part of that spectrum. We are not credit specialists but we have credit simulators that allow us to see the potential score increase, if any, when paying off debt.

It is not always the answer but can definitely help increase your scores if done properly.

Additional comments:

Multiple aspects determine the creditworthiness of a person for a mortgage loan. It is relatively rare that all aspects of a credit profile are picture perfect. Our loan officers are here to advise you as to the best strategy to prepare your application for a mortgage loan. This is a personal conversation, and when you work with Cliffco Mortgage Bankers, you work one-on-one with a loan officer -- not some anonymous person shielded behind a 1-800 number who will never have any relationship with you like in big banks. Cliffco Mortgage bankers is a fully delegated mortgage banking institution. That means we originate and fund 100% of our loans. We will never pass your loan off to a third party (contrary to most big banks), and all credit decisions and underwriting are done in-house by our highly-educated loan professionals.

Contact Cliffco Mortgage Bankers to prepare your mortgage loan application the right way for success: 516-408-7300

Cliffco Mortgage Bankers is fully licensed in New York, New Jersey, Pennsylvania, Connecticut, Florida, and Texas. Our home office is in Uniondale, Long Island, NY. We cover all towns and hamlets of Long Island, as well other neighborhoods in NYC.

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