Question about Paying off CC debt

Tubelo · ‎03-01-2017

So as I mentioned in my other thread here, I'm having a reaaaally hard time getting a mortgage because of my DTI. I literally have no options whatsoever at this point.

With that said, my fiance came home today and told me he wants to pay off my remaining CC debt so that I can get approved for the mortgage and have zero additional debt. He doesn't want it back, nor do I have to repay him.

If I were to tell the LO I was working with tht I've literally just cleared all my debt, is that going to raise a red flag? (I have not been approved for a loan yet at all) Are they going to deny based on the fact that I've all of a sudden had my debt paid off for me? Will they just need his word that he paid them off and does not intend to be repaid?

Thank you

StartingOver10 · ‎03-01-2017

@Tubelo wrote:
So as I mentioned in my other thread here, I'm having a reaaaally hard time getting a mortgage because of my DTI. I literally have no options whatsoever at this point.

With that said, my fiance came home today and told me he wants to pay off my remaining CC debt so that I can get approved for the mortgage and have zero additional debt. He doesn't want it back, nor do I have to repay him.

If I were to tell the LO I was working with tht I've literally just cleared all my debt, is that going to raise a red flag? (I have not been approved for a loan yet at all) Are they going to deny based on the fact that I've all of a sudden had my debt paid off for me? Will they just need his word that he paid them off and does not intend to be repaid?

Thank you

These are all excellent questions for your LO. He may need to sign a gift letter for your debt paydown/payoff. Check with the LO first so you can follow the right method. What a nice fiance!

Tubelo · ‎03-01-2017

Yea, I'm awaiting the LOs response (which is very slow), and I figured I'd ask here. Would it still be considered a "gift" if my fiancé pays my debts off with his own bank account and no money is transferred to me?

StartingOver10 · ‎03-02-2017

@Tubelo wrote:
Yea, I'm awaiting the LOs response (which is very slow), and I figured I'd ask here. Would it still be considered a "gift" if my fiancé pays my debts off with his own bank account and no money is transferred to me?

I don't know. That's why I thought you should ask your LO

Maybe some of the LO's here can jump in with their suggestions so you know how a variety of lenders treat it.

Tubelo · ‎03-02-2017

He finally came through and replied to me! Definitely said that fiance can pay off my debt as long as it is done with HIS money from HIS own accounts prior to them pulling my CR again in 30 days. I would be golden at that point!

Thank you all for your help!

StartingOver10 · ‎03-02-2017

@Tubelo wrote:
He finally came through and replied to me! Definitely said that fiance can pay off my debt as long as it is done with HIS money from HIS own accounts prior to them pulling my CR again in 30 days. I would be golden at that point!

Thank you all for your help!

Sorry I didn't know the answer but I'm glad he got back to you!