Mortgage people/ financial people come in...

What is better in this current market regarding applying for a mortage....
Does the mortgage company like to see:

A. more $ in the bank and thus a larger downpayment available to put on a house with good credit


B. Less $ in the bank but no credit card debt or minimal credit card debt which in turn would probably be a a little bit better credit. (maybe credit would go from good to excellant) Guessing an FHA loan would be the route in the case???


TIA



ETA about the FHA loan

Message edited 3/17/2011 1:03:24 PM.

Re: Mortgage people/ financial people come in...

Unless you have poor credit i suggest you keep as much liquid as possible.

Re: Mortgage people/ financial people come in...

I am not a mortgage person but I work with them and talk to them all the time, and I think the most important factor when getting approved for a mortgage is your debt to income ratio.

Also, banks generally want you to have "reserves" (usually around 2 months worth of mortgage payments) in the bank AFTER you pay the down payment and closing costs. So you don't want to deplete all of your cash.

Credit score is also a factor.

It's also a myth unless you have a huge down payment, you can't get a conventional mortgage. FHA is usually a little easier on income and credit requirements, and you only need 3.5% down for FHA, but mortgage people I work with say you can get conventional mortgage with as little as 5% down.

But I think your best bet is to talk to some knowledgeable mortgage people and see what they tell you (not only in terms of what you qualify for, but what will be most advantageous for you). If you need some recommendations, just let me know!