Ughhh, think I jumped the gun applying for a refinance

[BGinVA]

So after 2 hours on the phone with my second mortgage holder Bank of America, trying to resolve a dispute about how they are NOT applying my additional principal payments, and being transferred to 4 different associates to only finally be told to start over and re-call the first number that I called to get to them, I told the final associate that I think my time would be better spent looking for a new lender.

So with that in mind, within 2 hours I was in the refinance process with Quicken Loans for a 15 year FHA 1st & 2nd refinance at 3.6%.  This will all be great if it works out, I was paying 6.5% on the first and 9.9% on the 2nd with a balloon due at the end.  So this will allow me to pay the 1st mortgage off 7 years early, the 2nd off 5  years early with no balloon payment at the end for only $80 more per month.  Now here's my issues, I did a quick check on Quicken Loans and and the first 2 sites I checked they had pretty good reviews 4.2 & 4.5 out of 5.0 stars, the last one, which was obviously a place that people just go to complain so their was no balance had some pretty scary stories.  I do think sometimes the sites that are just for complainers are attracting people who likely were not qualified to begin with. 

So I'm sitting on a 630 FICO score, that he supposedly ran through the system and got a pre-approval.  He's since sent me the loan docs and I've electronically signed what needs to be signed that way and printed the papers I have to manually sign to fax on Monday.  So my first question is, does this loan seem doable with the information I provided being that I was given a "preapproval"?  If you aren't aware, Quicken requires a $500 advance towards processing fees and the appraisal, so I did it, knowing those are legitimate charges, and he didn't process it until he got the preapproval.  He stated that as long as everything I told him was correct and that the house appraises on value that there wouldn't be any problem.  Then I started reading about the long drawn out underwriting process and unending requests for "conditional items".  Anyone have any experience with them on this? 

Finally, I recently paid off my 2 credit cards down to nearly $0 balance, with the plan to start Christmas shopping with them on Black Friday, now I'm afraid to use them that it will mess up the funding, even though this is a planned expense, I don't want it to look like an act of desperation, I have 6 kids, 2  of which have partners and between my kids alone I'll spend more than the balance on my 2 credit cards.  If i can't use my cards, there will be no Christmas for my kids.  In addition, last week I got a "prequalified" credit card in the mail, that I responded to, hoping another credit line would help raise my score.  On the loan papers I had to fill out, it listed everyone that has done a credit check in the last 120 days and I have to disclose if any new credit was received.  You have to have the account number, a current statement, and so forth for those accounts.  How should I present this new one that I just mailed the certificate in for earlier this week and don't know for sure if I'm approved or what my credit line will be?  It said $1000, but sometimes that just means "up to" that limit.  This is what I get for jumping into this when I was mad.  In hind site I wish I had just waited until January to start this process, but now I'm locked in and have paid the $500 which I'll loose if I stop the process.  Any advice or suggestions welcome. 

[Booner72]

I've never refi'd a mortgage, but if it is anything at all like getting your first mortgage, that new credit card debt could end the deal.  I have no personal experience with Quicken but I have read nothing good here about them.  I also think adding the new credit card could be just as disastrous, especially if you plan on charging it up.

B4 going out on a Black Friday adventure, I'd call up the LO and see what he says about adding new debt.

We aren't going to have much of a XMAS this year present-wise, either.  But we are in our new house which is the best gift of all (though my two sons aren't going to see it that way).  They get to pick one gift (less than 100-150) and in addition to that, they'll get stuff from the family.  DH and I are buying a new roof next spring for our xmas presents.  So you will and can have a great xmas - it just might not be what you planned on.  Explain to everyone what is going on - do a name-drawing as those are very fun and can cut down expenses too.

Or, like you said, just eat the 500 and wait until January.  Can they apply that 500 to a new app next year?   They could AT LEAST hold the money for the appraisal, or, if you decide to cancel, wouldn't they refund the appraisal portion of the 500 and keep their "loan docs processing fees"?

[Walt_K]

What balance do your cards show on the reports that the lender pulled?  Were they already updated to show the $0 balances?  If so, running up your cards is going to be a major issue.  620 mid score is the minimum for a lot of lenders to approve FHA financing.  In addition to it not looking good just on a subjective level if you run up your card balances, you are going to drop your scores by increased utilization, and you don't have a lot of points to play with.

Is it at all possible for you to call and try to cancel that credit application before it is processed?  Your score is going to drop from a new account and a new inquiry.  If they've already ran the inquiry, then the card will appear on your report, and the damage is done (although I thought there was discussion with the CARD Act about being able to cancel cards and have them not show up on your report if you never activated them, can't remember where that came out).  But maybe you can call the application department for that lender and see if they can get rid of your application before its processed.  I don't know how they'd do this, but maybe if you have anything that has the RSVP ID on it or whatever, they might be able to track that.

As to the Christmas situation, I'm sure it can't be easy, but I had lots of Christmases when I was younger where my mom told me that Santa couldn't bring that much and/or that he was going to have to come late.  I might not have been the most understanding child every year, but I certainly appreciate what she was going through now, and I'm probably much the better for it. 

[frogfan12]

Maxing out the CCs for Christmas is not a good idea. The kids won't even remember half of the stuff you got them.