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Hello! Long time lurker, first time poster. My wife and I close in 2 weeks on our VA loan...we're very excited.
The one challenge we've faced is the necessity for cash reserves. The lender wants us to show at least $4000 in cash reserves. We've really struggled to not buy ANYTHING to be able to pull that off. We went from only $1200 in the bank to $4600 in a matter of 3 weeks and that was really hard to do.
Now that we've sent them a bank statement and the mortgage processor is generally satisfied that we've met all requirements, do we need to keep over $4000 in the bank? Are they likely to ask for another updated statement later? I've got bills to pay, groceries to buy...it's really tough.
Also I'm thinking about using my credit cards to buy groceries and gas just to keep our bank balance high. Will charging a few hundred dollars here and there hurt our application? I started the mortgage application with $2600 in credit card debt (I've got $25k total limits across all cards) and have chraged my cards up to a total of $3400 out of that $25k. I've been careful to keep the balance below 30% on any 1 credit card. Is this strategy safe? Does my bank balance even matter anymore?
Good points, I'll try to only use cards I know won't report a higher balance until after we close on the 15th.
These are the assets they are counting:
After I sent in the latest checking statement 2 days ago, my balance went up to $4900 in checking. But then we had to pay the cable bill, cell phone bill, rent @ $850, groceries, etc and we're down to only $3300 in checking.
We get paid again the day before closing and I don't anticipate getting any tax refund checks until March
Our CC balances have only gone up slightly, we didn't go out and buy a bunch of new appliances or anything...that'll come AFTER closing
What really frustrates us is that we can't get anyone to tell us EXACTLY how much money we need to keep in checking to be safe. I think our loan officer might have said $4000 but honestly can't remember...and now whenever I ask him or the processor how much is enough, they ignore my emails.
Could I be worried about nothing? I know most of us freak out prior to closing and I'm really feeling it now. I'm ready to pull my hair out.
So your loan officer ignores you too, huh? I guess that's part of the job description for loan officers and mortgage processors.
Normally we'd have much more in savings, but we'd been trying to pay down debt to increase our scores...I'd thought VA loans are 'zero down', but saw unexpected expenses related to the mortgage. We typically have $1000 left over per month but have been extremely conservative. I'll move what I don't need to pay bills into savings, thanks for the suggestion. I'm looking forward to building savings back up.
Are there underwriting guidelines that say how much in reserves you should have? Our PITI would be about $1050/month, so if he said $4000 maybe he was meaning 3 months of PITI because 4 months would be 4200....not sure...again, this is VA. Our lowest mid score was 680, so maybe we're more of a 'risk'.
It would be nice if we only needed 3150 and he was just trying to make sure we were being careful. I'm afraid the UW may ask for new bank statements in a week, at which time we will probably only have slightly more than 3150!