question on VA refinancing

[Anonymous]

I posted something similar on the creditcard forum and the good folks there suggested I try for more info here also.

I'm a 30% disabled vet living on Guam and currently have a freddie mac mortgage (since 2011) with a 350,000 balance. I'm now trying to do a VA refinance to get a bit better rate and get rid of the PMI (which is $300 a month).  I have a fico score of 824 for the last 6 months (was 849 in Jan).  My DTI is right about at the limit, but my problem is credit cards.

I've been to two local banks trying to VA refinance and both stated even though I have great credit score that since my wife and I have a total of 5 credit cards with access to $110,000 that there's some other ratio they factor in and I'm double the maximum amount of 'accessible credit' and I don't qualify and need to cancel cards in order to even be considered.  We carry no balance on any of them, when we use them we pay off the next month. None are store cards but just visas and MC, different ones for different perks (airline mileage/gas discount/etc). 

I always thought that cancelling a card was bad for your credit score, and I didn't realize there was some ratio of accessible credit that could disqualify you for a loan?  I'm on Guam and NFCU doesn't offer va loans here, I'm checking penfed but I don't believe they do either, so I'm stuck with local banks.  Any advice would be greatly appreciated, thank you!  

[StartingOver10]

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@Anonymous wrote:

I posted something similar on the creditcard forum and the good folks there suggested I try for more info here also.

I'm a 30% disabled vet living on Guam and currently have a freddie mac mortgage (since 2011) with a 350,000 balance. I'm now trying to do a VA refinance to get a bit better rate and get rid of the PMI (which is $300 a month).  I have a fico score of 824 for the last 6 months (was 849 in Jan).  My DTI is right about at the limit, but my problem is credit cards.

I've been to two local banks trying to VA refinance and both stated even though I have great credit score that since my wife and I have a total of 5 credit cards with access to $110,000 that there's some other ratio they factor in and I'm double the maximum amount of 'accessible credit' and I don't qualify and need to cancel cards in order to even be considered.  We carry no balance on any of them, when we use them we pay off the next month. None are store cards but just visas and MC, different ones for different perks (airline mileage/gas discount/etc). 

I always thought that cancelling a card was bad for your credit score, and I didn't realize there was some ratio of accessible credit that could disqualify you for a loan?  I'm on Guam and NFCU doesn't offer va loans here, I'm checking penfed but I don't believe they do either, so I'm stuck with local banks.  Any advice would be greatly appreciated, thank you!  

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^^^Very weird.  Are you sure you are stuck with local banks?  

[Anonymous]

thanks for the reply, yeah it's strange, I'm almost 50yrs old and I've never seen or heard this my entire adult life. I got my va loan prequal worksheet from bank #2 today, on the 'outstanding loans' section they list my current mortgage, personal loan, and wife's car loan, then the next 5 lines are our credit cards with the recommendation 'close account' beside 4 of them and the 5th 'reduce credit limit to $5000' and lists a monthly payment of $150 even though we have no balance. 

I know my preferred banks won't do a va loan here on Guam (nfcu/penfed) so I'm researching now who may be able to assist. If I have to I'm going to close the cards and just start applying for new ones in a year or so. 

[StartingOver10]

Have you tried to pm Shanethemortgageman here on this board? He is very knowledgeable and in CA - maybe he has sources in Guam.  I know nothing about Guam, just trying to get you to someone that can help before you close those accounts.