Reported debt vs actual debt.

[awp317]

Ok so after taking a break from the first house falling through, then a week of the flu, then christmas we are finally getting back on the horse for round 2 on mortgage applications, have decided to try a local bank, we are meeting with them Wednesday. I have been watching my cards very carfully, but used my USAA card very heavly for christmas shopping, most was internet shopping, since I dont like to put my debit card online I used the card. Anyway, nearly all of my cards are reporting a 2% or less usage on them except for the USAA card. It is reporting 12k, I have it paid down to a few hundred dollars total as a balance. However I just ran my report and its still reporting the full balance not reflecting the recent payment. But The LO is telling me he needs to start the application before the 10th to grandfather me in before the new rules start. Any suggestions? Can  USAA send a more recent statement to the bank directly? Thanks!

[StartingOver10]

LO is right about the 10th because that is when the new regulations kick in.

Can you get USAA to update the CRA's with your new balance? What is your utility with the $12k showing? It definately will affect your DTI with the $12k balance. Can you bring a bank statement showing you paid it to the LO? That way they can do a rapid rescore if you can't get USAA to show the new balance on your own right away.

[BrianB_The_Loan_Professor]

apply and supply the lender with the documentation that it has been paid they can adjust it - a rescore may be needed but I have seen them done with a simple credit supplement -

Good Luck

Brian

[awp317]

Well today went well, Very pleased with the meeting, He was happy with everything and was able to omit my usaa card. The only thing he said is he wants some of my cards closed as the under writer wont like all my avalible credit as in their eyes its future debt. He said to much credit isnt good. 4 cards is the absolute max I should have and the best is 2 , Have one card with a large limit (like around 50k), and one with a 10k or less. Otherwise they become unmanagle. He said once I closed to open them back up again. But doesnt reccommend it. 

[themizlyne]

Don't close any cards unless it's an underwriting condition of the loan (unless you really don't want those cards any more).

[StartingOver10]

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@themizlyne wrote:
Don't close any cards unless it's an underwriting condition of the loan (unless you really don't want those cards any more).

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^^^Exactly. Don't close any cards. Go through underwriting and get your approval subject to closing the cards if that is what the u/w states on the written loan commitment. That is a very unusual condition to close cards and very unusual for the LO to say you shouldn't have more than 4 cards and preferably no more than 2. That is straight up weird.

[awp317]

It wasnt a condition, Just a reccommendation. He just said it looks better to not have so much avalible spread on so many cards. He would rather see 4 cards with very large limits instead of 12 cards with moderate limits. Now that I have enough points to for a hotel stay vacation. I switched to using my CSP as my daily user now hoping to get that limit up to the 50k mark by next year.  I am thinking about getting rid of all but the 5 figure cards however (and target after the theft issue) Then once those appear as closed and I close, ask for limit increases. Im hoping that with a lot of my smaller cards closed who are from the same issuer (like the citi and chase) that my internal DTI will be increased and can be added to the larger lines.  We are set to close on the 27th of february, I asked for the 12th but the sellers wanted more time to move out which im ok with.