02-19-2013 08:23 PM
I am wondering.....we are going on vacation next week...(this has been booked since before we decided to start the FHA loan process), we normally buy a prepaid visa gift card so we can track our spendings alot easier instead of having to check out bank account.
My question is....will making a $600 transaction at a store( for the prepaid gift card) cause any red flags from the underwriter when they ask us for an updated bank statement? Or should we just use our bank account and watch our account closely?
02-19-2013 08:23 PM
this is not a red flag
02-20-2013 04:19 AM
02-20-2013 07:23 AM
Possibly they like to try and stick to a limit and it's easier to do so when you've already spent the cash for the prepaid card. If you start using credit cards with the rationale that you'll pay in full later, you don't always observe the same boundaries and limits.
Anyway, if an underwriter had a problem with the the OP spending their own money, laugh in their face and tell them to find a new line of work. I assume this wouldn't impact the ability to pay closing costs and such so it shouldnt' be an issue.
02-20-2013 01:54 PM
Someone whom is looking for the responsbility of a mortgage should be able to "observe the same boundaries and limits" that come with the responsibility of a credit card.
02-20-2013 08:09 PM
It will not be an issue. However.. do not use the advice that someone else gave and put it on a credit card. Prior to your closing, your lender is going to pull an LQ report, which gives them a breakdown of your credit up to date. Changes to your initial report, inquiries, new accounts, raised balances, etc.. can all take your approval away in an extreme case. It has happened before. Without knowing the full situation, I can't give you an accurate depiction of how likely that is for you.. but using funds from your checking/savings is extremely safe and you have zero to worry about with the purchase.
02-21-2013 07:18 AM
We do something similar when we are traveling. As another said, it's much easier to stick to a budget when you have a self-imposed limit and one specific funding item. After several trips where we doubled our planned budget, this turned out to be the way to go. It's a psychological thing although the point above regarding not charging a lot onto your credit card right now is also very valid depending on limits, utilization and how far you're stretching your DTI to purchase the home.
So long as the $600 transaction does not put your bank account very low (And supposedly in some situations that won't even matter) I would not worry about it at all.
02-21-2013 09:11 AM
Thank you for the advice, I hate to use credit cards, so I dont want to our trip expenses on there. We only have credit cards to build our credit..lol I will go ahead and use a pre paid visa card. Disney World here we come!
myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.>> About myFICO