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First time home buyer? Can you use a credit card to pay closing costs?

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First time home buyer? Can you use a credit card to pay closing costs?

 
Message 1 of 18
17 REPLIES
Frequent Contributor

Re: First time home buyer? Can you use a credit card to pay closing costs?



johninark wrote:



I dont think so, I believe you have to show earnest money..
4/15/2008 EQ 539 TU 489 EX 575, 7/25/2008 EQ 669 TU 555 EX 611, 7/31/2008 EQ 669 TU 555 EX 624, 8/5/2008 EQ 669 TU 586 EX 624
Message 2 of 18
Super Contributor

Re: First time home buyer? Can you use a credit card to pay closing costs?

Cannot be borrowed.
 
Retired Lender
Message 3 of 18
Regular Contributor

Re: First time home buyer? Can you use a credit card to pay closing costs?

Except for 401K, right?
Message 4 of 18
Super Contributor

Re: First time home buyer? Can you use a credit card to pay closing costs?

you are borrowing from yourself.... which isn't borrowing.
 
Retired Lender
Message 5 of 18
Senior Contributor

Re: First time home buyer? Can you use a credit card to pay closing costs?



DallasLoanGuy wrote:
you are borrowing from yourself.... which isn't borrowing.





Similarly, one can take out a policy loan against the cash value of other investments such as the cash value of a life insurance policy, and again that isn't debt. When I took out a loan on my life insurance policy for part of the down payment, the underwriter did ask for a letter from New York Life documenting the source of the money that suddenly appeared in my bank account.
TU 791 02/11/2013, EQ 800 1/29/2011 , EX Plus FAKO 812, EX Vantage Score 955 3/19/2010 wife's EQ 9/23/2009 803
EX always was my highest when we could pull all three
Always remember: big print giveth, small print taketh away
If you dunno what tanstaafl means you must Google it
Message 6 of 18
Super Contributor

Re: First time home buyer? Can you use a credit card to pay closing costs?

Good point, Matt
Retired Lender
Message 7 of 18

Re: First time home buyer? Can you use a credit card to pay closing costs?

Many loan programs vary with underwriting so you should speak with your lender about such requirements but typically down payment and closing costs cannot be borrowed. Many programs allow gifts from families or not-for-profit organizations, and even federal and state grant programs that can provide down payment and closing cost assistance. Programs may also allow the seller to pay the closing costs so you can negotiate the costs into the sales contract. Typically, secondary market guidelines limit seller concessions to no more than 3% of the purchase price of the home. If the closing costs are required to be paid by the borrower then the underwriter would require verification typically through deposit statements reflecting that you have adequate funds to close. You may still be able to borrow money if you are avoiding wiping out the checking account which the lender may be okay with if they have verified that you have enough on deposit but make sure that you notify them of the borrowed funds so that they can incorporate the new debt into your debt-to-income ratio. Good luck with your home purchase!
Message 8 of 18
Senior Contributor

Re: First time home buyer? Can you use a credit card to pay closing costs?



DallasLoanGuy wrote:
Cannot be borrowed.
 





Okay, here's a dumb question (and, NO, I am not seeking to "buck the system!!" ): what's to keep someone from cash advancing the money from a CC to pay for closing?

I mean, how would they KNOW where the money came from??

For that matter, why can't you borrow the money for closing? I thought that some loans roll the closing costs into the loan itself ... wouldn't that be borrowing for the closing?

Again, not trying to find a way to get past the system or cheat in ANY way, just curious!!

~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*

Hubby's FICOs when we started: high 400s (June 2008)
Hubby's FICO NOW (04/06/09): TU: 679 EQ: 608 EX: ???
My FICOs: TU: 643, EQ: 606
Closed on new home: 1/20/2009 -- If we can do it, YOU can do it!!

Message 9 of 18

Re: First time home buyer? Can you use a credit card to pay closing costs?

 
Message 10 of 18