davef139 said:so how much of that 90k HH can u really show when fr comes knocking? lol I hope you dont plan to buy a car anytime soon either

I can easily prove the 90k with paystubs, with the help of my parents They don't mind, they already gave me a copy for FAFSA.
No, I don't plan on buying a car anytime soon. I have a friend who bought one and from his experience, its not worth it. I drive an old but reliable Camry.

There's no evidence for 79% helping to avoid adverse action. Perhaps 69%, though the evidence is scant. (At least one of the FAKOs mentions "above 70%" as a negative factor.) 49% is considered "safe". Note that adverse action is "hit or miss", e.g. I've had ABOVE 90% off and on for years with no serious consequences.

As for the mortgage, I challenge anyone to provide EVIDENCE that a large CL hurts -- even for a first mortgage. I had $42K of debt (at low rates; $94K CL) when I got my first mortgage, and much more in various refinancings. Your interest rate depends largely on your FICO score ... which can get a BOOST from large CL. (And, as others noted, worst case is that you reduce the CL -- which is trivial to do but I'll bet NEVER comes up.)

It may SEEM like mortgage companies OUGHT TO be worried about someone going out and running up a huge CC debt, but that's just not the way it works. The reality is that those who have a high FICO score tend not to do that. FW folks know how and when to trash (and recover) their FICO score for fun and profit, but for the majority of regular folks, it's a good predictor. That's why mortgage companies use it.

Incarnate said:'fear factor'? It has nothing to do with fear. It has to do with fact. Your loan will be locked in for 5 years, then it will go up each and every year if they so please. You can also pay extra on the principle on a 30 year fixed, so I don't know why you are bringing that up. You will still end up paying who knows what interest rate in 5 years - 7%? 8%? More? You can get a 30 year fixed loan for 5.625% today, and that rate will be the same in 20 years, and you can pay extra priciple to save money if you wish.

Strange. First you claim it has nothing to do with emotions, and then go on to describe an entirely emotional point of view. 30 year fixed rate is 1% higher at PenFed, and requires principle payments. It makes little sense to pay back 5 or 6% money when I can make 10+% with long term investments. Where are you finding 5 5/8 on a 30 yr fixed? That's with a buydown, right? Freddie Mac says the average 30 year fixed is 6.18% with a 0.4% buydown as of 1/4/07. USAA is offering 5 5/8 but with a 1.75% buydown. USAA doesn't let you roll that into the loan without paying a premium for 'cash out' either, PenFed does. If that 5 5/8 is at par I'll give you a big wet kiss for pointing me there. But PenFed is paying all the third party closing costs except title insurance as well so that definitely factors in.

BTW, no, they can't charge me 'who knows what interest rate' or raise it 'as they so please'. That's classic emotional thinking right there and just plain wrong. Also, I'll just refi again if I don't like the go to rate but but the odds are I'll have refinanced again long before new years day 2012. The only reasons to go with a fixed loan are emotional, period.

Here's the numbers: 30 year fixed at 6.25 on 350k is a payment of $2155.01 total of 105980.96 after 5 years paying down $23,319.64 in principle. 5/1 ARM at 5.25% is a payment of $1531.25 totaling $91,875.00 in interest with $23,319.64 staying in my long term investment accounts for a total of 37,425.60 in liquid assets not counting expected investment gains. Having these liquid assets makes me a much more desirable borrower to a lender. A payment $625/month higher is that much more likely to result in default in the event of a liquidity squeeze. Sorry the numbers just don't crunch in favor of a 30 year fixed, or in favor of paying off a penny of principle, at least with the all other factors equal. PenFed wasn't discounting the rate on amortized 5/1s when I locked. 5 1/4% either way.