History: This person applied for home mortgage loan 7 months ago. At that time he did not have any liabilities/loans and had funds in his bank account too.
Bank went through loan approval process and approved this person for several types of loans (80/20, 80/15/5, etc) after looking into salary, bank statements, etc. This person went ahead and signed a contract with builder to build a new house.
Things have changed and now this person does not have money to make even 5% down and still wants to proceed with home purchse since there are enough credit card balance transfer offers he can use to make 5% or even 20% down without a problem.
I guess my question is would bank have any issues with down payment using credit card balance transfer? Is there a possibility bank would know this person ows money to a credit card company (if not timed properly since they are going to run a credit report again)? Has anybody done it before? any legal issues with this approach?
Thanks!
QAData
Anthony
Tags: Credit Report, Loan Approval, Loans
Rule of thumb says you can’t borrow the down payment.
Yes they will have a huge problem with the bank, and this loan will not close; plus, all deposit monies paid to the builder will be forfeited.
You cannot borrow the downpayment.
If you take a cash advance out on a credit card, they will want to see the “seasoning” of the funds which can be 30 to 60 days.
If they know it’s from a credit card, they will want to repull credit to find out how your debt-to-income ratio is affected.
Where did your downpayment go?