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

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DallasLoanGuy
Super Contributor

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



@Anonymous wrote:


@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?? bank deposit?

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!!

underwriting guidelines say 3% down, they mean 3% down. borrowing 3% = 100% financing.
yes, the seller funded dpa got around it.... but we all see what happened with that.
 
could someone get a cash advance and let it season for 2 months in cheching so there aren't any large deposits on the 2 months bank statements provided? sure.... but you are answering a question on the loan application that says: "is any part of the down payment borrowed?" if you say no.... you committed mortgage fraud.

 
Retired Lender
Message 11 of 18
MattH
Senior Contributor

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



@Anonymous wrote:


@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!!


\

First, they can pull a credit report, and they will notice a big increase in credit card balances shortly before closing. Second, they generally ask the borrower to specify the source of the down payment -- and lying about that constitutes mortgage fraud, for which one can go to prison. There are indeed loans that roll the closing costs into the loan -- or there used to be, those are much much much harder to find nowadays -- but such special programs carry higher rates to reflect the higher risks. The rate on each loan reflects its risk profile, so lying to make oneself resemble a lower-risk category than is truly the case is fraud. Other things being equal, the borrower who has made a substantial down payment is much safer for three reasons: (1) they have demonstrated an ability to save, (2) they are more likely to have some equity even if the property drops in value, and (3) a homeowner who has some skin in the game has more of an incentive to maintain the property.
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 12 of 18
Anonymous
Not applicable

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



@DallasLoanGuy wrote:


@Anonymous wrote:


@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?? bank deposit?

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!!

underwriting guidelines say 3% down, they mean 3% down. borrowing 3% = 100% financing.
yes, the seller funded dpa got around it.... but we all see what happened with that.
 
could someone get a cash advance and let it season for 2 months in cheching so there aren't any large deposits on the 2 months bank statements provided? sure.... but you are answering a question on the loan application that says: "is any part of the down payment borrowed?" if you say no.... you committed mortgage fraud.

 





Ah. Gotcha.

I didn't get why it matter HOW the 3% got there. I didn't know it was against the rules (well, I think I did, I just didn't know how or why).

Once again, I gotta say, I don't see how you keep up with all this stuff!! o_O
Message 13 of 18
DallasLoanGuy
Super Contributor

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



Wonderin wrote:



Once again, I gotta say, I don't see how you keep up with all this stuff!! o_O


When I get lost..... I ask Shane. LOL
 
but seriously.... after 2 months seasoning, do you really know whether the money in your account is borrowed or not?
Let's say I took a $100 cash advance to pay the water bill.... then got paid. now I have 3%. Is there any borrowed money in my account?!?!?
 
It does come down to ethics....
 
Retired Lender
Message 14 of 18
Anonymous
Not applicable

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



@DallasLoanGuy wrote:


@Anonymous wrote:



Once again, I gotta say, I don't see how you keep up with all this stuff!! o_O


When I get lost..... I ask Shane. LOL
 
but seriously.... after 2 months seasoning, do you really know whether the money in your account is borrowed or not?
Let's say I took a $100 cash advance to pay the water bill.... then got paid. now I have 3%. Is there any borrowed money in my account?!?!?
 
It does come down to ethics....
 





W-e-e-e-l-l-l-l, I couldn't do it, even if I wanted to. I am the world's worst liar. I was barely able to keep the whole "Santa Claus is real" thing going with my kids even when they WANTED to believe!!

Now, if it's a form, I might be able to, if I HAD to (as long as I didn't have to look someone in the eye). But it would be something that would keep me up at night to the point where I would probably call the person/LO at 2am crying and begging for forgiveness, spilling every single deep, dark secret I've carried since birth. :/

Nothing, and I mean NOTHING is worth that kind of stress ... much less the humiliation!!!

So, nope, I'd not be able to do it. Smiley Sad
Message 15 of 18
Anonymous
Not applicable

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

I should probably mention two things: Mama was an FBI agent and could spot a liar at 100 paces. The few times I DID try to lie as a kid, I got found out, and lemme tell you, that woman could GUILT you. I mean, crying, begging, drooling, slobbering, incoherent guilt. Offering to throw yourself in front of the first speeding train kinda guilt.

Now, that's what I call negative reinforcement!! o_O
Message 16 of 18
DallasLoanGuy
Super Contributor

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



Wonderin wrote:
I should probably mention two things: Mama was an FBI agent and could spot a liar at 100 paces. The few times I DID try to lie as a kid, I got found out, and lemme tell you, that woman could GUILT you. I mean, crying, begging, drooling, slobbering, incoherent guilt. Offering to throw yourself in front of the first speeding train kinda guilt.

Now, that's what I call negative reinforcement!! o_O

May I suggest a litle reading for your issues?
 
Sigmund Freud

 

ok, just kidding....    sory..... it is late and i couldnt resist


Retired Lender
Message 17 of 18
Anonymous
Not applicable

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



@DallasLoanGuy wrote:


@Anonymous wrote:
I should probably mention two things: Mama was an FBI agent and could spot a liar at 100 paces. The few times I DID try to lie as a kid, I got found out, and lemme tell you, that woman could GUILT you. I mean, crying, begging, drooling, slobbering, incoherent guilt. Offering to throw yourself in front of the first speeding train kinda guilt.

Now, that's what I call negative reinforcement!! o_O

May I suggest a litle reading for your issues?
 
Sigmund Freud

 

ok, just kidding....    sory..... it is late and i couldnt resist







Pfft. Did you miss the part where I said mama was a Fed??

She not only made me read that stuff, she practically used it to beat my behind! Smiley Wink

Now THAT is cruel and inhuman punishment at it's finest!! o_O
Message 18 of 18
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