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I am purchasing a home and my loan is an FHA. I have my 3.5% down-and have already put it down as a deposit/earnest money on my home-a foreclosure, and the seller's are paying 3% of my closing costs. I have to come up with an additional $2300.00 for the rest of the closing costs.
I have had an unexpected expense arise, and it has taken my extra cash. I was planning on getting a cash advance on my credit card-one of those checks that you write on your credit card, for the remaining closing costs ($2300.00). When I was talking to my loan guy, and he mentioned that they would be doing a check of my bank account, I mentioned that I would be paying for my closing costs this way. He freaked out and told me that I could not borrow money, to borrow money. He said that there was no way I could do this. At best, he suggested that I go and get a loan, as this would not affect my getting the house, but charging the $2300. to my credit card would. This makes no sense to me. Isn't one just the same as the other-each is incuring a bill??? Am I missing something here?????
My credit score is very good, and I don't have lots of debt.....anyone who can shed any light on this issue, I would appreciate it!!!!! Thanks for any help and understanding you can provide!!
Ask your loan officer if you can increase your interest rate and lower your closing costs. At a higher interest rate, the loan officer will be paid on the back side which they can use some of that money to pay the closing costs.
Your LO is right... you cant just go pulling money off of a credit card. If they do a credit check last minute, your loan will not fund. You're really not even supposed to borrow the money from anyone, to be honest. The best bet is to do what Victor said - but it might be too late in the game.... because it requires new TIL, etc etc. It is possible to accomplish.
You need to ask your loan officer what your solutions are...
Victor has a great suggestion. If you don't want to go that route you could either get a secured loan (i.e. a loan against a vehicle or some other asset) or get a gift from a relative.
They won't allow an unsecured loan like a credit card advance.
Just to be clear, so if I use my credit card for purchases until the house closes, I won't get the loan approved. It looks like my appraisal was included in this closing amount, so I will only have to come up with about $1000. to $1200. as I have scraped together $1000. on my own but am short the other-and if I charge this on my credit card, and make the balance go up $1200. I won't get the loan??
Victor has a great suggestion. If you don't want to go that route you could either get a secured loan (i.e. a loan against a vehicle or some other asset) or get a gift from a relative.
They won't allow an unsecured loan like a credit card advance.
Umm... no. Increasing your liabilities AT ALL would change the ability to get a loan... secured or unsecured. Your assets are used to calculate your DTI and debt as compared to total assets. By adding a loan ANYWHERE, you're changing those ratios and your ability to get the loan.
Definitely do not get a loan.
Also - dont get a gift from a relative WITHOUT permission from your broker. There are rules for that as well - especially in an FHA loan... and last minute.
Umm... no. Increasing your liabilities AT ALL would change the ability to get a loan... secured or unsecured. Your assets are used to calculate your DTI and debt as compared to total assets. By adding a loan ANYWHERE, you're changing those ratios and your ability to get the loan.
Definitely do not get a loan.
Also - dont get a gift from a relative WITHOUT permission from your broker. There are rules for that as well - especially in an FHA loan... and last minute.
That would only be true if the borrower were all ready at the dead max DTI ratio. The majority of borrowers would have the "room" to add a small debt to thier ratio.
Getting a gift is not that complicated, but do have your loan officer assist you in the process.
Just to be clear, so if I use my credit card for purchases until the house closes, I won't get the loan approved. It looks like my appraisal was included in this closing amount, so I will only have to come up with about $1000. to $1200. as I have scraped together $1000. on my own but am short the other-and if I charge this on my credit card, and make the balance go up $1200. I won't get the loan??
Not to rain on your parade, but "scraped together" funds typically will not work either. Unless you can document where it came from the lender won't be able to count it. Basically the $$ have to come from your employment or be gifted from a relative. A buddy can't slip you $500 nor will they accept "oh I had some money in my safe at home".
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