Request credit line DECREASE: when does it make sense?

[CreditInspired]

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@Gmood1 wrote:

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@CreditInspired wrote:

I wonder if an UW feels one is over extended if he/she has a humongous amount of available credit and feel uncomfortable extending a mortgage unless it's reduced. Or is this just a myth. IDK, just wondering out loud. 

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Definitely a myth. @CreditInspired 

My 18 now 19 yr old nephew had $100k in revolving credit lines reporting when he bought his home. 

Navy Fed and Regions bank both approved him for the mortgage without blinking.

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Thanks @Gmood1.  Glad to hear it's a myth. And kudos to your nephew for his successes. Quite impressive. 

[Revelate]

Myth, that is not the business mortgage originators are in these days.

Their job (outside of portfolio/jumbo lending) is to meet the requirements of the GSEs/FHA and not a speck more... though some lenders still have overlays which just shows they don't know what business they are in: there is no money in mortgage loans these days, it is all in origination fees and selling the loans as quickly as possible to open room on your warehouse line (that you got from one of the big banks anyway).

ETA: well mortgage servicing is a valid business too, I am going to be entertained and SMH if whoever I do wind up with sells at least the servicing back to Chase.

[CreditInspired]

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@Revelate wrote:

Myth, that is not the business mortgage originators are in these days.

Their job (outside of portfolio/jumbo lending) is to meet the requirements of the GSEs/FHA and not a speck more... though some lenders still have overlays which just shows they don't know what business they are in: there is no money in mortgage loans these days, it is all in origination fees and selling the loans as quickly as possible to open room on your warehouse line (that you got from one of the big banks anyway).

ETA: well mortgage servicing is a valid business too, I am going to be entertained and SMH if whoever I do wind up with sells at least the servicing back to Chase.

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Thanks @Revelate for the detailed reasoning why my assumption was a myth. 

[L-TWT]

I requested a CL decrease when adding an AU to my Cap1 account. Unlike Amex, most lenders do not allow you to limit an AU spending.

[Anonymous]

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@Gmood1 wrote:

Definitely a myth. @CreditInspired 

My 18 now 19 yr old nephew had $100k in revolving credit lines reporting when he bought his home. 

Navy Fed and Regions bank both approved him for the mortgage without blinking.

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Briskly walks over to NFCU!  

To me it would seem that someone with $100K+ of unused revovling credit has demenstrated experience in handling it responisbly. Especially if they've maintained it for several years. But still DTI is going to be the biggest factor, as we've seen many people with 620 get approved all the time.