Pending Mortgage -- Will High Utilizations For A Single Month Hurt Me?

[AGingrich]

Hi guys,

I've been following these forums for years now and finally got my loan approved for a house at a 700 FICO score. One issue -- I just purchased a house (well, offer was accepted) and my bank wants me to pay the down payment ($14k, 10%) plus they want to see 3-6 months of cash reserves. I currently have $17k in the bank, which is perfect. Unfortunately, rent is due on my old apartment and I really don't want to risk paying with my cash reserves and having the bank come down on me for not having enough.

My options as I see them:

• Put rent on a credit card, but with the reporting date coming very soon, that will put me at 90% or so utilization for the month (I'm usually 15% or below)
• Don't pay rent on time, then pay the late payment fee plus rent when I get paid on the 14th (10 days late) (thus avoiding all of this)
• Pay with cash reserves, but risk the bank saying I don't have enough and denying the final loan

I'm leaning toward one or two. What would you do?

Thanks!

[TheGardner]

Maybe you can speak with your landlord about your situation. Remember the bank may require landlord verification and a late payment may end up hurting (although it is less than 30 days).

are they just requesting bank statements? What date will they need? If all else fails pay on the last day of the grace period with a check buying you a few extra days? Possibly they will allow a held check, basically agree to wait to cash the check until the 14th if you pay the late fee but giving the check early. Of course nothing will require them to wait so ymmv on a premature deposit..

good ode luck hope it works out!

[SnackTrader]

I don't know what I would do in this situation but option 1 will impact your credit score if the bank does a credit verification prior to closing. Definitely talk to the landlord or bank about what is happening, it's really just a timing problem that can probably be resolved with option 2 or 3, or by asking a friend/family member for a short-term loan. 2 weeks isn't very long to borrow money from someone.

[StartingOver10]

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@AGingrich wrote:

Hi guys,

I've been following these forums for years now and finally got my loan approved for a house at a 700 FICO score. One issue -- I just purchased a house (well, offer was accepted) and my bank wants me to pay the down payment ($14k, 10%) plus they want to see 3-6 months of cash reserves. I currently have $17k in the bank, which is perfect. Unfortunately, rent is due on my old apartment and I really don't want to risk paying with my cash reserves and having the bank come down on me for not having enough.

My options as I see them:

• Put rent on a credit card, but with the reporting date coming very soon, that will put me at 90% or so utilization for the month (I'm usually 15% or below)
• Don't pay rent on time, then pay the late payment fee plus rent when I get paid on the 14th (10 days late) (thus avoiding all of this)
• Pay with cash reserves, but risk the bank saying I don't have enough and denying the final loan

I'm leaning toward one or two. What would you do?

Thanks!

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^^^I would pay with cash reserves and reimburse your reserves with your paycheck.

Don't put it on a card. Don't pay late.