Qualifying for best re-fi rate

[johnson.kenneth@gmail.com]

We have an ARM adjusting in October and need to refi. We are currently using too much of our credit card capacity (~75%), and are going to pay it down with some cash reserves. In order to get the best rate, should we:

A) Pay off one credit card all the way and leave it open
B) Pay down all credit cards so none are anywhere close to limit
C) Pay down the highest balance cards
D) Doesn't matter, since they look at total used over total capacity
E) Something else you haven't thought of, wiseguy


Thanks in advance for your advice.

[tmvijai]

It may be too late to adjust your credit history but you can take a chance. They look at the overall debt-income ratio doesn't matter how much you have one each credit card. WHen applying to mortgage,they not only look at your credit score, they also look at your debt-income ration and back end ratio, is it possible you can pay from your income after paying all debts. So whether you pay one credit full or all credit card decent amount, it will only affect the score which is not the only criteria for mortgage approval.

So it doesn't matter as per mortgage but in general it is good to pay off the high interest rate credit first.