Remember, you always have the option to find another lender...
I honestly don't know what I would do in your shoes, but just keep your options open and don't rush into anything.
I honestly don't know what I would do in your shoes, but just keep your options open and don't rush into anything.
I'd shop other lenders. You already have your paperwork together. I'd find a couple other local places with good reps and have then run the numbers and drop off your paperwork. SInce you already have everything together you should have word in a week so if they are running right.
It does happen if the dti will exceed the UW guidelines. The concern is if OP charges his CLI's up and can no longer pay the mtg. You can either shop for a different loan, lender or see if the UW is willing to waive that condition.
Lexie, maybe I misunderstand you here, but available credit has no bearing on DTI, just payments due. If the OP has paid down all balances to $0 (and left them there), then having the open lines shouldn't impact approval.
HOWEVER, if its the case that the lender needs to pull a new report to see the $0 balance and thus adjust the DTI calculation, then that might avoid the OP closing accounts. This is probably what you are referring to...
HOWEVER, if its the case that the lender needs to pull a new report to see the $0 balance and thus adjust the DTI calculation, then that might avoid the OP closing accounts. This is probably what you are referring to...
Snack, it's the possibility of using his total lines and since they are open and revolving UWs will and can use those figures. Lets assume OP has a high car pyt but he has less than 6 mos before its paid off. The installment loan will not hurt him because the terms are fixed and will be closed shortly.
Makes sense?
Makes sense?
Let me add, that condition is something can be over written assuming there are no other compensating factors
I agree there. Open lines are always a risk. However, there are two things about this situation that lead me to believe OP might find a better deal elsewhere, or even a better deal at the current lender if they pulled a new credit report.
1. DTI, the calculation itself, only takes into account the payments required in a given month. A $500 CC balance still only has a minimum payment, so unless the lender is stressing the borrower's capacity by modeling a fully extended line, the OP's DTI would go down once those balances hit $0.
2.My experience with mortgage lenders tells me that they want to qualify as many borrowers as possible, and therefore it is a rare find to get a lender who goes above and beyond the standard DTI calculations to qualify a borrower. Almost everyone applying for a mortgage has a credit card, and it would be silly to reduce potential customers by modeling fully extended revolving credit lines if your competitors are not doing that.
These both point me in the direction that this condition is separate from DTI, and is an extraneous attempt to reduce the risk of this borrower getting into CC debt. The lender can't stop the borrower from just reopening the lines after closing, so it is pointless to make them close the accounts before closing.
I would ask for this condition to be waived if it was me, but OP needs to weigh their options carefully if the lender fails to waive the condition. Unless of course these TLs don't mean anything to you in the long run...
1. DTI, the calculation itself, only takes into account the payments required in a given month. A $500 CC balance still only has a minimum payment, so unless the lender is stressing the borrower's capacity by modeling a fully extended line, the OP's DTI would go down once those balances hit $0.
2.My experience with mortgage lenders tells me that they want to qualify as many borrowers as possible, and therefore it is a rare find to get a lender who goes above and beyond the standard DTI calculations to qualify a borrower. Almost everyone applying for a mortgage has a credit card, and it would be silly to reduce potential customers by modeling fully extended revolving credit lines if your competitors are not doing that.
These both point me in the direction that this condition is separate from DTI, and is an extraneous attempt to reduce the risk of this borrower getting into CC debt. The lender can't stop the borrower from just reopening the lines after closing, so it is pointless to make them close the accounts before closing.
I would ask for this condition to be waived if it was me, but OP needs to weigh their options carefully if the lender fails to waive the condition. Unless of course these TLs don't mean anything to you in the long run...