Closing Credit Cards to Close on House

[Wovenyarn]

I spoke to my LO today and he advised me that I may have to close 2 of my credit cards to complete my loan.  One was First Premier which I advised him was already paid off and closed.  The second was Sam's Club.  I didn't really want to close that one but I told him that if its necessary then I will do it.  My left over cards will be BoA, Rooms To Go, Care Credit and Children's Place.

Is that common in the mortgage industry to ask someone to pay off and close credit cards to qualify?

[DallasLoanGuy]

the rule is:

you cannot pay down revolving debt to qualify(lower dti)

if you close the cards, they are no longer revvolving.... so you can pay them off and close them to qualify.

in my scenario it is very common. not common at all for lender to tell you to close cards with no explanation.

ask questions 

[Wovenyarn]

The LO said that it's because they need to free up my residual income.  I guess the numbers are really close.  I don't mind closing Sam's, I was just curious more than anything.  I'll do whatever it takes at this point to get to closing.

He then also tried to add on at the end of the conversation that I really shouldn't have more than 3 tradelines open anyway. 

[DallasLoanGuy]

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@Wovenyarn wrote:

The LO said that it's because they need to free up my residual income.  I guess the numbers are really close.  I don't mind closing Sam's, I was just curious more than anything.  I'll do whatever it takes at this point to get to closing.

He then also tried to add on at the end of the conversation that I really shouldn't have more than 3 tradelines open anyway.   i have had clients with 10+ creit cards and 4+ car loans and they are triple a clients who got the best rates/terms.....  so that statement was stupid

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