Using ACH balance transfers

[Anonymous]

I have 4 chase cards, 2 citi cards, 1 discover, and 1 suntrust bank card with balance transfer offers. I called on a few and was told I could transfer straight into my bank account using ACH. What would be the best way to utilize all these transfers the same day? I am in need of short term cash, but am afraid as I start to use them other cards will start to shut down. Anyone ever done this. It’s about $70,000 worth of transfers.

[Anonymous]

That does not sound like a balance transfer. That sounds like a cash advance. 

After you transfer the 70K into your account how much available credit will you have? A few months of high utilization will scare some banks. Every bank is different. You need to research each one. You might want to investigate getting a personal loan instead.

[Anonymous]

I called the credit card companies and they said it was a balance transfer, kind of like in the old days writing yourself the balance transfer check. I’m trying to close on a house in less than a week ( the lawyer doesn’t take credit cards, it has to be wired) and some pitfalls have come up. So I’m just trying to get the money to get in the house, then I can refinance etc. I just was curious if anyone had ever taken advantage of that many balance transfers at once.

[Anonymous]

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@Anonymous wrote:

That does not sound like a balance transfer. That sounds like a cash advance. 

After you transfer the 70K into your account how much available credit will you have? A few months of high utilization will scare some banks. Every bank is different. You need to research each one. You might want to investigate getting a personal loan instead.

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No, its really is a balance transfer.  It works similar to the convenience checks that lenders use to mail to you; the transfers can be made to another creditor or you can do a next-day transfer to your checking account.  I currently have several similar offers from BofA, Citi, Chase, PenFed and a couple other lenders.

[CreditInspired]

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@Anonymous wrote:
I called the credit card companies and they said it was a balance transfer, kind of like in the old days writing yourself the balance transfer check. I’m trying to close on a house in less than a week ( the lawyer doesn’t take credit cards, it has to be wired) and some pitfalls have come up. So I’m just trying to get the money to get in the house, then I can refinance etc. I just was curious if anyone had ever taken advantage of that many balance transfers at once.

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But then you’ll be hit with another snag with the mortgage lender. The LO doesn’t allow borrowed funds for the purpose of buying a house. Plus your DTI will increase enormously. 

Or or am I missing something and you’re buying directly from a private owner and not getting a mortgage?

[NRB525]

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@Anonymous wrote:
I have 4 chase cards, 2 citi cards, 1 discover, and 1 suntrust bank card with balance transfer offers. I called on a few and was told I could transfer straight into my bank account using ACH. What would be the best way to utilize all these transfers the same day? I am in need of short term cash, but am afraid as I start to use them other cards will start to shut down. Anyone ever done this. It’s about $70,000 worth of transfers.

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Well, if by utilize you mean initiate all the Balance Transfers, they usually have an on-line address you can go to, or a place in the bank website menu system where you can request these to be sent to your bank. The paper checks are an option, although look at the fine print: Each check, each BT offer is contingent on the CCC accepting and funding the Balance Transfer payment. With this many in a short time, it is possible (but by no means certain) that some of the credit cards will balk at funding, if they see all the other BT's appearing.

Each of the BT offers you pull from must go to your personal bank account. From there, if the attorney requires ACH funding, then you initiate a transfer from your checking account to the payee. I would not try to transfer funds directly from the BT to the attorney. That sets up another level of complication but you want to keep track of how each of the BT is progressing, by seeing them land in your bank account first. "Oh, I never got the money" is not a good start to a conversation with your attorney.

What are the "pitfalls" that have come up regarding the house purchase? If a lawyer is involved to resolve them, I would be cautious about going around a mortgage application to try to rush into the house with bags of cash. Who are these payments of $70,000 going to? My concern would be, at this moment, neither the bank nor your attorney can guarantee you will get in the house with assurance of full ownership, clear title. That is the reason any standard mortgage is not moving forward yet. If other concerns turn up, are those a bigger risk? If it turns out ownership, title, is not clear, do you know how much of a mess that could be? The BT / Advances these days usually only last 12 months, so the clock begins ticking to get everything resolved.

Or I could be rushing to conclusions myself, and it is a "simple" situation to fix.

[Anonymous]

This would be enough for me to just bypass a mortgage lender and get me over the finish line.

[Anonymous]

Thanks for all the useful info. The pitfall is that I’m tied to family finances more than I thought and now I’m not qualifying for enough with out huge down payment. And the gift money i was going to use is starting to have stipulations we weren’t aware of. So it looks like a mortgage just won’t work and I need to come up with cash. Afterward I can get things straightened out with family and refinance I think.

[NRB525]

I would be cautious.

What you are outlining is this:

Gift funds are not coming through. Gift funds would be acceptable to mortgage lenders because there are no strings attached.

Cash advances from a credit card raise your displayed debt level, and it sounds like the mortgage has not funded, pending this down payment. Your credit will be re-pulled to verify you have not taken on additional debt. Oops....

The mortgage itself is further leverage, above what you are trying to take as cash advances. The mortgage has not funded yet.

This has the possibility to not turn out well. I would re-think how to get to the house. Can you lease to buy?

The gift money, if it does not come through, may be the sign that it is not time to buy yet.

[Anonymous]

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@NRB525 wrote:

I would be cautious.

What you are outlining is this:

Gift funds are not coming through. Gift funds would be acceptable to mortgage lenders because there are no strings attached.

Cash advances from a credit card raise your displayed debt level, and it sounds like the mortgage has not funded, pending this down payment. Your credit will be re-pulled to verify you have not taken on additional debt. Oops....

The mortgage itself is further leverage, above what you are trying to take as cash advances. The mortgage has not funded yet.

This has the possibility to not turn out well. I would re-think how to get to the house. Can you lease to buy?

The gift money, if it does not come through, may be the sign that it is not time to buy yet.

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Just to clarify...I don't think the OP is talking about a cash advance.  A balance transfer has the advantage of a much lower APR than a cash advance, although the effect is the same on your credit.  I currently have offers from BofA where I can transfer the entire $70,000 credit line to my checking account for only a 3% fee.  The higher APR only kicks in if I fail to repay before the specified offer period expires.