I’ve been working with a client for almost a year now attempting to refinance their mortgage and save them a considerable amount each month. The challenge has been low credit scores due to delinquent credit card payments.
Recently, the clients called to say they listened to my advice. Their credit cards were all up-to-date. With current low rates and increasing values, it seemed that now was the perfect time to revisit their plans.
They had my checklist of documents we’d need to begin the mortgage process and agreed that the best place to start was with a new credit report.
I was quite surprised to discover that their credit was even worse. The borrower was correct… all his credit cards were up to date. The big problem was they had been paying the mortgage payment 30 days late for the last 4 months. They got caught up on their credit cards by being delinquent on their mortgage payment. Not a good idea!
Now we’ll have to wait another 12 months. Hopefully all payments will be made on time next year and by then their credit scores will have recovered to a point where it makes sense to refinance.
Remember… pay mortgages first, car payments second, installments debts next and then credit cards. For excellent credit scores ALL payments need to be paid on time.