If you use a CC, the mortgage company would be conserned that your liability will increase. Will they still do the loan? Some will, some won't.. It would really depend on your current financial and credit situation.
Current situation is excellent. I have a good income and very low debt to income ratio. I was considering this if I wanted to get a house that was available but I couldn't get the downpayment for about 3 months. After I get the house, then I can pay off the cc. Also my credit score is low to mid 700's. I'd rather do this than pay the closing costs of a refinance in 3 months. I'd rather get the good interest rate and pay off the CC in 3 months.
[addsig]
How are you going to get the money off your credit card?
I know some credit card companies issue checks with the credit card and run promotions(low interest rate for a period of time) if you use them. Nice deal if you used with discretion.
In my experience, when I have a down payment as part of the deal, the lender wants to see a source of "seasoned" funds.
That is one reason they give me for asking for three months of bank statements. If the lender knows that the source of your down payment will be a credit card, then they take that into consideration in calculating your back-end ratios. Whether they will still make the loan or not is up to the individual lender.
The question is "Do they season the down payment". Some do, Some Don't. Of the ones that season it, some season it for 30 days on up to 90 or 120.
If you bring in a cashiers check, they probably aren't going to question it. That said, it would bite to find out at the closing table that they had to season it.
I highly doubt you can give your title company a credit card and ask them to charge it. Maybe you can, but a cash advance or balance transfer will be your best bet.
I bought my last rehabber house by putting the down payment on my credit card, all 20% of it. It was a 0% for one full year deal. Cheaper than the bank! What's cheaper money than 0% for a year? I don't normally do this but my usual banker "resigned" three weeks before the closing and I didn't want to lose the deal. the bank already had our financial statement showing stocks and mutual funds well above the needed down payment. I said that "I guess I'm gonna have to liquidate some of that stock before closing." I wrote the balance transfer check to myself a week before closing and then brought a cashiers check to the close. As I said I never had done that but I was in a bind as they changed my "no money down" loan to a 20% down loan overnight and the banker basically said take the new loan offer or leave it and don't buy the house. I had already given the bank's commitment letter to the seller. Anyway, I guess if I had told the bank that I was going to use my CC they would not have given me the loan. I just said that I'd come up with the cash to close and he said "okay". If you didn't have money in the bank a week ago and suddenly you have the money they may question how you got it.
I take it a seasoned downpayment is money that has been sitting in your account for several months...
Quote:
On 2004-01-10 18:02, MrMike wrote:
IF a mortg company is going to require a 'seasoned' down payment you probably would find out LONG before closing.
Infact they would probably ask for proof when you originally filled out the mortg application.
[addsig]
True. I have a 401k with 20k in that. I guess I could explain that it would come from that. Hmm... but in replies above, it would suck if the money had to be seasoned.
Quote:
On 2004-01-10 18:57, Sandbahr wrote:
I bought my last rehabber house by putting the down payment on my credit card, all 20% of it. It was a 0% for one full year deal. Cheaper than the bank! What's cheaper money than 0% for a year? I don't normally do this but my usual banker "resigned" three weeks before the closing and I didn't want to lose the deal. the bank already had our financial statement showing stocks and mutual funds well above the needed down payment. I said that "I guess I'm gonna have to liquidate some of that stock before closing." I wrote the balance transfer check to myself a week before closing and then brought a cashiers check to the close. As I said I never had done that but I was in a bind as they changed my "no money down" loan to a 20% down loan overnight and the banker basically said take the new loan offer or leave it and don't buy the house. I had already given the bank's commitment letter to the seller. Anyway, I guess if I had told the bank that I was going to use my CC they would not have given me the loan. I just said that I'd come up with the cash to close and he said "okay". If you didn't have money in the bank a week ago and suddenly you have the money they may question how you got it.
[addsig]
Answering the below reply, I have some checks from my CC companies that boast a low percentage. I can write the check to myself and bring a cashiers check to the table...
Quote:
On 2004-01-10 17:21, hibby76 wrote:
The question is "Do they season the down payment". Some do, Some Don't. Of the ones that season it, some season it for 30 days on up to 90 or 120.
If you bring in a cashiers check, they probably aren't going to question it. That said, it would bite to find out at the closing table that they had to season it.
I highly doubt you can give your title company a credit card and ask them to charge it. Maybe you can, but a cash advance or balance transfer will be your best bet.
[addsig]
The answer is "yes" you can use the money from the credit card advance.
The catch is this: On conforming loans we'll have to verify liquid funds prior to close, and the funds need to be seasoned. That's why either bank statements are used, or, a verification of deposit that shows the current balance and two month average balance.
So once funds are verified, we don't really care where the actual funds come from. So if you have joint bank accounts with relatives or friends and these funds can be verified, then you might be able to show enough money to qualify, and then go to closing with the credit card cash advance.
Non-conforming loans do make provision, in some cases, for using cash-advances.
NINA or no-income no-asset verification loans don't verify any funds.
Ask your L/O this question so they can ask the underwriter for you. Sometimes they want to see enough funds seasoned in the account to cover a few months of the future mortgage payment. Most of the time they dont care. Heck, alot of lenders even allow the down to come from a gift. If they require the funds to be seasoned...it means they will take your bank statements and pull an average from them from the last 12 months. Easier option is to let your Loan officer know about this so they can find a outlet without the requirement
When you are talking about season vs non seasoning of money that depends on the bank. youcan show stocks,bonds 401k's, mutual funds bank statements, gift funds or anywhere else you have the money for a source. You can take the money from anywhere, the bank doesn't care where it come from. lori
If you use a CC, the mortgage company would be conserned that your liability will increase. Will they still do the loan? Some will, some won't.. It would really depend on your current financial and credit situation.
Current situation is excellent. I have a good income and very low debt to income ratio. I was considering this if I wanted to get a house that was available but I couldn't get the downpayment for about 3 months. After I get the house, then I can pay off the cc. Also my credit score is low to mid 700's. I'd rather do this than pay the closing costs of a refinance in 3 months. I'd rather get the good interest rate and pay off the CC in 3 months.
[addsig]
How are you going to get the money off your credit card?
I know some credit card companies issue checks with the credit card and run promotions(low interest rate for a period of time) if you use them. Nice deal if you used with discretion.
Mike
In my experience, when I have a down payment as part of the deal, the lender wants to see a source of "seasoned" funds.
That is one reason they give me for asking for three months of bank statements. If the lender knows that the source of your down payment will be a credit card, then they take that into consideration in calculating your back-end ratios. Whether they will still make the loan or not is up to the individual lender.
The question is "Do they season the down payment". Some do, Some Don't. Of the ones that season it, some season it for 30 days on up to 90 or 120.
If you bring in a cashiers check, they probably aren't going to question it. That said, it would bite to find out at the closing table that they had to season it.
I highly doubt you can give your title company a credit card and ask them to charge it. Maybe you can, but a cash advance or balance transfer will be your best bet.
IF a mortg company is going to require a 'seasoned' down payment you probably would find out LONG before closing.
Infact they would probably ask for proof when you originally filled out the mortg application.
I bought my last rehabber house by putting the down payment on my credit card, all 20% of it. It was a 0% for one full year deal. Cheaper than the bank! What's cheaper money than 0% for a year? I don't normally do this but my usual banker "resigned" three weeks before the closing and I didn't want to lose the deal. the bank already had our financial statement showing stocks and mutual funds well above the needed down payment. I said that "I guess I'm gonna have to liquidate some of that stock before closing." I wrote the balance transfer check to myself a week before closing and then brought a cashiers check to the close. As I said I never had done that but I was in a bind as they changed my "no money down" loan to a 20% down loan overnight and the banker basically said take the new loan offer or leave it and don't buy the house. I had already given the bank's commitment letter to the seller. Anyway, I guess if I had told the bank that I was going to use my CC they would not have given me the loan. I just said that I'd come up with the cash to close and he said "okay". If you didn't have money in the bank a week ago and suddenly you have the money they may question how you got it.
I take it a seasoned downpayment is money that has been sitting in your account for several months...
Quote:
On 2004-01-10 18:02, MrMike wrote:
IF a mortg company is going to require a 'seasoned' down payment you probably would find out LONG before closing.
Infact they would probably ask for proof when you originally filled out the mortg application.
[addsig]
True. I have a 401k with 20k in that. I guess I could explain that it would come from that. Hmm... but in replies above, it would suck if the money had to be seasoned.
Quote:
On 2004-01-10 18:57, Sandbahr wrote:
I bought my last rehabber house by putting the down payment on my credit card, all 20% of it. It was a 0% for one full year deal. Cheaper than the bank! What's cheaper money than 0% for a year? I don't normally do this but my usual banker "resigned" three weeks before the closing and I didn't want to lose the deal. the bank already had our financial statement showing stocks and mutual funds well above the needed down payment. I said that "I guess I'm gonna have to liquidate some of that stock before closing." I wrote the balance transfer check to myself a week before closing and then brought a cashiers check to the close. As I said I never had done that but I was in a bind as they changed my "no money down" loan to a 20% down loan overnight and the banker basically said take the new loan offer or leave it and don't buy the house. I had already given the bank's commitment letter to the seller. Anyway, I guess if I had told the bank that I was going to use my CC they would not have given me the loan. I just said that I'd come up with the cash to close and he said "okay". If you didn't have money in the bank a week ago and suddenly you have the money they may question how you got it.
[addsig]
Answering the below reply, I have some checks from my CC companies that boast a low percentage. I can write the check to myself and bring a cashiers check to the table...
Quote:
On 2004-01-10 17:21, hibby76 wrote:
The question is "Do they season the down payment". Some do, Some Don't. Of the ones that season it, some season it for 30 days on up to 90 or 120.
If you bring in a cashiers check, they probably aren't going to question it. That said, it would bite to find out at the closing table that they had to season it.
I highly doubt you can give your title company a credit card and ask them to charge it. Maybe you can, but a cash advance or balance transfer will be your best bet.
[addsig]
The answer is "yes" you can use the money from the credit card advance.
The catch is this: On conforming loans we'll have to verify liquid funds prior to close, and the funds need to be seasoned. That's why either bank statements are used, or, a verification of deposit that shows the current balance and two month average balance.
So once funds are verified, we don't really care where the actual funds come from. So if you have joint bank accounts with relatives or friends and these funds can be verified, then you might be able to show enough money to qualify, and then go to closing with the credit card cash advance.
Non-conforming loans do make provision, in some cases, for using cash-advances.
NINA or no-income no-asset verification loans don't verify any funds.
Everyone here is right....or wrong.
Ask your L/O this question so they can ask the underwriter for you. Sometimes they want to see enough funds seasoned in the account to cover a few months of the future mortgage payment. Most of the time they dont care. Heck, alot of lenders even allow the down to come from a gift. If they require the funds to be seasoned...it means they will take your bank statements and pull an average from them from the last 12 months. Easier option is to let your Loan officer know about this so they can find a outlet without the requirement
When you are talking about season vs non seasoning of money that depends on the bank. youcan show stocks,bonds 401k's, mutual funds bank statements, gift funds or anywhere else you have the money for a source. You can take the money from anywhere, the bank doesn't care where it come from. lori