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Personal loan before mortgage?

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Anonymous
Not applicable

Personal loan before mortgage?

I am looking to tidy up my DTI a bit. I have about 20k in CC debt. I am considering a full or partial loan from my local bank because they will not report it. Is this advisable? Thanks in advance!

9 REPLIES 9
kc0039
Established Contributor

Re: Personal loan before mortgage?

If you have 20K in CC debt and it's paid down dramatically, the mortgage broker/lender will ask where you got the funds from. They will ask if you get your credit pulled and your balances haven't updated yet. You tell them where you get it, they're going to scrutinize your funds in the statements you have provided.

Licensed in IL
Message 2 of 10
Anonymous
Not applicable

Re: Personal loan before mortgage?

I only had about 12k CC debt reporting when they pulled my report and preapproved me. Should I just borrow 8k off the books?
Message 3 of 10
dragontears
Senior Contributor

Re: Personal loan before mortgage?

Borrowing anything "off the books" is mortgage fraud, you are required to list all debts even those not listed on your CR.
Message 4 of 10
Anonymous
Not applicable

Re: Personal loan before mortgage?


@dragontears wrote:
Borrowing anything "off the books" is mortgage fraud, you are required to list all debts even those not listed on your CR.

I didn't know that. Thanks for the heads up!

Message 5 of 10
VALoanMaster
Valued Contributor

Re: Personal loan before mortgage?


@Anonymous wrote:
I only had about 12k CC debt reporting when they pulled my report and preapproved me. Should I just borrow 8k off the books?

What type of mortgage were you pre-approved for, FHA, VA or conventional?

 

VA Mortgage Expert. Mortgage Banker lending in All 50 States.
VA, FHA, USDA. Jumbo, Conventional.
CAIVRS Expert.
Message 6 of 10
Anonymous
Not applicable

Re: Personal loan before mortgage?


@VALoanMaster wrote:

@Anonymous wrote:
I only had about 12k CC debt reporting when they pulled my report and preapproved me. Should I just borrow 8k off the books?

What type of mortgage were you pre-approved for, FHA, VA or conventional?

 


VA

Message 7 of 10
VALoanMaster
Valued Contributor

Re: Personal loan before mortgage?


@Anonymous wrote:

@VALoanMaster wrote:

@Anonymous wrote:
I only had about 12k CC debt reporting when they pulled my report and preapproved me. Should I just borrow 8k off the books?

What type of mortgage were you pre-approved for, FHA, VA or conventional?

 


VA


VA has the most flexibility when it comes to debt to income ratios but if you need to lower your ratios due to a manual underwrite or because of the residual income requirements, the best thing to do is to take a loan out "against" your 401K or other retirement account.

 

The reason this works is because VA doesn't require us to count that monthly payment against your debt ratios & you will typically get a decent rate because the loan is secured.

VA Mortgage Expert. Mortgage Banker lending in All 50 States.
VA, FHA, USDA. Jumbo, Conventional.
CAIVRS Expert.
Message 8 of 10
Anonymous
Not applicable

Re: Personal loan before mortgage?


@VALoanMaster wrote:

@Anonymous wrote:

@VALoanMaster wrote:

@Anonymous wrote:
I only had about 12k CC debt reporting when they pulled my report and preapproved me. Should I just borrow 8k off the books?

What type of mortgage were you pre-approved for, FHA, VA or conventional?

 


VA


VA has the most flexibility when it comes to debt to income ratios but if you need to lower your ratios due to a manual underwrite or because of the residual income requirements, the best thing to do is to take a loan out "against" your 401K or other retirement account.

 

The reason this works is because VA doesn't require us to count that monthly payment against your debt ratios & you will typically get a decent rate because the loan is secured.


I do have a TSP I could pull from. Would that be worthwhile?

Message 9 of 10
VALoanMaster
Valued Contributor

Re: Personal loan before mortgage?

IMHO it only makes sense if you can take out a loan against the TSP account. If you have to liquidate then you're paying taxes & penalties as well as loosing the potential earnings from leaving that money in the account. Does that make sense?

VA Mortgage Expert. Mortgage Banker lending in All 50 States.
VA, FHA, USDA. Jumbo, Conventional.
CAIVRS Expert.
Message 10 of 10
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