topic Re: Hide a balance... in Credit Cards

Hide a balance...

Anonymous — Thu, 28 Mar 2013 18:37:47 GMT

Not sure if this would work or even be frowned upon but I had an idea..

I'm in the mortgage process and was looking to hide a balance on a credit card. I have 2 USAA credit cards. I have a 2k balance on one and 0 on the other. The 2k statement cuts in a few days. Rather then paying out of pocket to pay it off. What if I were to cash advance on the other directly to my checking account (no fees involved) pay off the 2k. Let the statement hit. Then cash advanace again on that card and pay the other off. That way when both statements cut a 0 balance is reported.

Am I asking for trouble haha??

Re: Hide a balance...

Gunnar419 — Thu, 28 Mar 2013 18:49:55 GMT

Sounds like asking for trouble to me. In the runup to granting a mortgage (at least in my experience), banks will scrutinize every unusual deposit made to your bank account, even if you're not claiming the funds as part of your downpayment. They will spot this as chicanery.

Clever chicanery. But definitely chicanery.

Re: Hide a balance...

Anonymous — Thu, 28 Mar 2013 18:50:58 GMT

Is a $2000 balance really going to make a big difference in terms of a mortgage application ?

Why not cash-advance $1000 from one card and apply it to the other card ?

It would still not meet the ideal utilization goal, but it's probably better that showing a card that is maxed-out.

Not to pry, but: if money is that tight, are you sure that this is the best time to be applying for a mortgage, in the first place ?

Re: Hide a balance...

pdog661 — Thu, 28 Mar 2013 18:54:12 GMT

Well......... One could say this is not ethical. You are understating your debt to income ratio, and this may allow yourself to get into a bad situation.

Also, when you get to underwriting they are going to ask where you got the 2k deposit, and my interrupt the closing process.

2K is going to result in a 50 dollar monthly payment. This should not effect your overall debt to income ratio. Personally if this small monthly payment make you not qualify for the mortgage I would suggest you re-think your mortgage price. I was nervous one my first home and I qualified for an additional 500 dollar a month payment.

Good luck I hope it all works out for you.

Re: Hide a balance...

Anonymous — Thu, 28 Mar 2013 18:56:13 GMT

Card is not maxed out. Its an 8k card. My DTI is very close by VA standards. Its not a big deal but was just thinking outside the box. My over all utilization is around 4%

Re: Hide a balance...

pdog661 — Thu, 28 Mar 2013 18:57:43 GMT

Do you mind sharing your income, current debts, credit score and mortgage amount?

Re: Hide a balance...

Anonymous — Thu, 28 Mar 2013 19:12:47 GMT

I'd rather not give specifics. With the new mortgage my dti would be about 38%. VA max is 41%. Scores are over 700

Back to the subject its not that big of a deal. I think I am just making myself paranoid for no reason haha. $50 bucks is not that big of a deal

Re: Hide a balance...

webhopper — Thu, 28 Mar 2013 19:23:44 GMT

@Anonymous wrote:
Card is not maxed out. Its an 8k card. My DTI is very close by VA standards. Its not a big deal but was just thinking outside the box. My over all utilization is around 4%

There are better ways of lowering your DTI, and you will trigger some flags by having the deposits etc...

The better way to handle this would be to refinance any existing debt to a longer repayment period, or cheaper interest rate... OR, buy a cheaper house.

I recommend buying a cheaper house if you're really pushing VA loan limits... they go pretty high as it is from what I've read in the past about the VA loan program. Do you want to be house poor?

Tha'ts my $0.02 cents, and its not a personal attack, its just based on what I would do if I were in that situation. I was actually in that situation back in 2011 and ultimately decided not to offer on a home that was within my pre-approval amount, but would really make me uncomfortable debt-wise. I ended up buying a cheaper house on a 20 year term, rather than trying to eke out approval on a more expensive home on a 30 year term.

hopefully you will find a solution that works for you and your needs as far as the loan approval goes.

Re: Hide a balance...

Anonymous — Thu, 28 Mar 2013 19:24:22 GMT

this is a bad idea.

cash advance fees are very high, and they usually have a higher APR than "normal" balances. this is usually meant as a last resort for people who need cash for emergencies.

Talk to your loan officer about your DTI ratio and see if there's anything else you can do. Also, what if you put off getting a mortage for a few months? Will that work for your plans? At least you have a few months to prioritize paying back debt.

Trust me, it is a VERY bad idea to get into more debt right before a mortage. You will be spending a lot on your card or getting more loans after you purchase a home for many misc. expenses and the debt can pile up really quickly.

Re: Hide a balance...

webhopper — Thu, 28 Mar 2013 19:36:19 GMT

High DTIs can be overcome if you receive an approved status from Automated Underwriting, or if there are strong compensating factors to approve you for a greater than 41% DTI.

Examples of compensating factors:

High credit score,

Substantial Cash Reserves leftover after closing

Length of time with job

working spouse not listed on the application (unaccounted for income)

Strong history of saving $$ each month

Shorter repayment term (15 or 20 yr VS 30 yr)

Special Education or Training

A borrower’s debt-to-income ratio (DTI) is very important and in general is set at a maximum of 41%–but you should discuss your situation with a VA lender for more information as circumstances or compensating factors may work in your favor even if your DTI is at or near the maximum. Don’t assume you aren’t able to qualify for a VA guaranteed mortgage loan–do the math with your loan officer for best results.

Re: Hide a balance...

tattooedhusker — Thu, 28 Mar 2013 19:41:33 GMT

Long story short...You play with fire and you're gonna get burned

Re: Hide a balance...

Anonymous — Thu, 28 Mar 2013 19:57:31 GMT

I appreciate all of the responses. Like I said previously I think I was just worring a little to much. I have been at my job for 11yrs. I have run all of my budget numbers and understand what I can afford. My family lives a pretty simple life. As far as being house poor goes I would rather be house poor in a nice house..one that my family and I can enjoy for years to come.

I can just pay the card off out of my savings and be done with it. I didn't thnk I would have been the only one ever to thing of doing this haha

USAA CC cash advances to a USAA checking account has no fees attached to it - just some FYI

Re: Hide a balance...

cashnocredit — Thu, 28 Mar 2013 20:05:00 GMT

I had to list all my debts on an application and shifting them around to mask some on a CR wouldn't change what you have to list. Debts are debts whether or not they are on your credit report and mortgage apps have you list them.

Re: Hide a balance...

webhopper — Thu, 28 Mar 2013 20:35:01 GMT

@Anonymous wrote:
I appreciate all of the responses. Like I said previously I think I was just worring a little to much. I have been at my job for 11yrs. I have run all of my budget numbers and understand what I can afford. My family lives a pretty simple life. As far as being house poor goes I would rather be house poor in a nice house..one that my family and I can enjoy for years to come.

I can just pay the card off out of my savings and be done with it. I didn't thnk I would have been the only one ever to thing of doing this haha

USAA CC cash advances to a USAA checking account has no fees attached to it - just some FYI

BTW you have very strong compensating factors... I think you are worrying too much....

Dont worry I have a lot of money going towards housing payments too... Actually, 2 houses, one that is a rental.

I like the idea of having a lot of housing equity as I get close to retirement.

Relax!

Re: Hide a balance...

Anonymous — Thu, 28 Mar 2013 21:10:05 GMT

Right on... thanks webhopper

Re: Hide a balance...

Anonymous — Thu, 28 Mar 2013 23:06:50 GMT

That's going to cause trouble. Every large non payroll deposit needs to be sourced so the underwriter will find out about your operation.

Re: Hide a balance...

boomhower — Thu, 28 Mar 2013 23:33:03 GMT

Don't try any funny business, your just asking for trouble.

Re: Hide a balance...

cashnocredit — Thu, 28 Mar 2013 23:33:07 GMT

@Anonymous wrote:
That's going to cause trouble. Every large non payroll deposit needs to be sourced so the underwriter will find out about your operation.

Yep. Don't do anything unusual preceding a mortgage app. Those guys were spanked for being too loose on apps and now are looking for anything these days.

Re: Hide a balance...

myjourney — Thu, 28 Mar 2013 23:41:13 GMT

An experienced mortgage underwriter may catch you at this and it could have adverse conditions..I wouldn't do it.

Re: Hide a balance...

Anonymous — Thu, 28 Mar 2013 23:53:24 GMT

Yeah bmp i don't plan on going through with it.

But if someone wasn't going through the mortgage process what is everyone's take on it? Easy way to lower your utilization. I think at some point usaa would take some action and probably close your cards