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Cash Advance Balance on Credit Card

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Anonymous
Not applicable

Cash Advance Balance on Credit Card

In the next month or so I am planning to apply for a mortgage loan. Credit scores are decent enough, and I've gotten my credit utilization down to about 60% (it's not great, but it's better than it was.)

 

However, one thing I've noticed recently... Over the course of several years with my credit card (current balance around $8,000) I have at times taken a cash advance here and there. Usually it wasn't intentional, like a payment from my checking account to the credit card balance, which I realized shortly after I needed in my checking account for rent because I forgot what day it was. Stuff like that.

 

So here's the important question... On my credit card statement, it shows a balance on purchases, and then a separate balance on Cash Advances. The cash advances are about $3,000 of the total balance. They are charged interest at the same fairly low rate 10%.

 

That balance has been present for a long time, as up until about the end of last year I was living beyond my means. Since then I have been paying the card down, and the balances have been decreasing.

 

Independently of paying the card down, I have saved about $2500, applying for loan when I reach $3000. This is all money that has come in via payroll and other means. There are no cash advances in the past six months.

 

Will this cash advance balance cause problems when the underwriter goes through my documents?

 

Message 1 of 5
4 REPLIES 4
Anonymous
Not applicable

Re: Cash Advance Balance on Credit Card

As long as you aren't using the cash advance as funds to close, you are fine. We typically never ask for credit card statements. 

Message 2 of 5
Anonymous
Not applicable

Re: Cash Advance Balance on Credit Card

Follow-up question!

 

Final balances on my june statement:

Checking: 2189.44

Savings: 1243.26

 

$1,025 of that is about to go to rent...

 

But for purposes of mortgage pre-approval, will they see my balance as $3431.70? Or will they ask to see my balance as of the day that I apply? $1000 of that is about to go to rent.

 

(this is being combined with a city homebuying initiative which provides 5% of purchase price towards closing/downpayment, I know that $3000 in liquid assets wouldn't get me far otherwise)

 

Message 3 of 5
dragontears
Senior Contributor

Re: Cash Advance Balance on Credit Card

If I remember right my lender asked for 2 months of bank statements when I applied and since it took over 30 days before I closed they asked for a new bank statement before closing
Message 4 of 5
Anonymous
Not applicable

Re: Cash Advance Balance on Credit Card

True.  They want to see some funds in your account to cover your expenses just in case.  They normally want another bank statement & pull your credit again.

Message 5 of 5
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