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Established Member
cupcake25
Posts: 28
Registered: ‎02-17-2009

Balance Transfer before closing on house?

Husband and I are under contract for a new construction house and should close on July 29th.  We have already been preapproved and credit has been pulled. Husbands current score is around 680 and mine is around 670.  High enough for FHA which we have applied for. Now to the question....

 

I have a balance of about $4000 on a BofA card with 0% interest until the end of this month (0% interest since July 2007). The normal APR is15% on BofA I have the option of transfering the balance to Discover at a 5% rate with a 4% transfer fee.  This transfer would pretty much max my Discover card out but leave a 0 balance on BofA. I'm concerned if I do this transfer that it may affect decrease my score before closing. I'm not sure if LO will pull credit again before closing (we have a collection account that will be dropping off right before closing) and LO may need to pull (not sure, he did not mention that he would have to). 

 

Any suggestions? Is it even cost effective to do the transfer? Would my score change if I do the transfer?

New Contributor
ospopo5
Posts: 66
Registered: ‎04-28-2008

Re: Balance Transfer before closing on house?

Not sure on what you should do.  I suggest just leaving it.

 

I am sure that your credit will be pulled again before you close in July.  They will want to make sure that everything is still solid.


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Frequent Contributor
Cleanmachine
Posts: 396
Registered: ‎04-30-2008

Re: Balance Transfer before closing on house?

I would also suggest that you leave things as they are until you finally complete settlement.

 

Maxing out that Discover Card will surely be a score killer and cause you some problems.

 

Recheck the offer from Discover. What is the time period for the 5% rate?

 

After your zero rate expires, call BOA and request a APR reduction.

Established Contributor
Watchmann
Posts: 985
Registered: ‎05-14-2008

Re: Balance Transfer before closing on house?

LEAVE IT ALONE.  You have little to gain and a lot to lose.  Best recommendation is to pay it down as soon as possible and do not make any purchases that you can't PIF, nor open any new accounts, until closing.  New activity with balance transfers or adding new unsecured debt going into closing on house is not wise.
Established Member
cupcake25
Posts: 28
Registered: ‎02-17-2009

Re: Balance Transfer before closing on house?

[ Edited ]

The balance transfer option with Discover is only good until 5/09 But they always give me sometype of offer. I'm sure another offer will be there after we close (we at the end of July).

 

I had a feeling it would be best to leave it where it is but I just wanted to get some opinions. Thanks for all the suggestions!

 

I am working my way through my credit card balances. I've stopped using them and am paying them aggressively (500 a month). I should be out of CC debt by the end of the year (keeping my fingers crossed).

 

Good idea on calling BofA to see about APR reduction. I will do that this month. Thanks!

Message Edited by cupcake25 on 04-06-2009 05:56 PM
Message Edited by cupcake25 on 04-06-2009 05:56 PM
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Epic Contributor
haulingthescoreup
Posts: 28,115
Registered: ‎04-01-2007

Re: Balance Transfer before closing on house?

It might cheer you up to figure how relatively little interest you'll actually be paying for 3 months. Rough estimate: divide your APR by 4, and multiply that percentage by your balance, and then round it up a bit. So for a $4K balance, it will cost you maybe $50/ month, and that's without appreciably reducing your principal.

Sure, you don't want to be doing that on an ongoing basis, but that's not bad until you get the mortgage nailed down.

Congrats on the aggressive paydown of your balances, and good luck with your closing!
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Regular Contributor
Credit_repair
Posts: 157
Registered: ‎01-30-2009

Re: Balance Transfer before closing on house?

I would recommend leaving the balance in your BOA card and aggressively working to pay it down. I recently paid off $4k on my BOA card since they raised my APR...
Established Member
cupcake25
Posts: 28
Registered: ‎02-17-2009

Re: Balance Transfer before closing on house?

Thanks for the suggestions. I am going to leave it where it is and just keep paying aggressively. I want the credit cards to go away and never surface again!

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