Cash out Refi Conditions

[Anonymous]

We are trying to do a cash-out re-fi.  Our lender (Nova Home Loans) is requiring us to close the 2 credit card accounts and then they will issue checks for the balances at closing.  They will pull another credit report to confirm the accounts have been closed prior to approving the loan.  Apparently this is a new step in the requirements. Our Capital One account told us it will not be reported Closed until there is a -0- balance, so we are in a Catch-22.  I did a conference call w/lender and Capital One so they do know that I have done what they have asked.  But Cap. One said that the card could still be used.

Anyone with experience with this?  Will this satisfy the underwriter?

[Anonymous]

Just found out the answer    The lender is not willing to accept my word that no charges will be made on the account.  So they're suggestion is to close the other cc acct. and they will pay off that cc and our car loan.  We will increase the loan amount a few thousand and receive cash back at closing that we can apply to the Capital One on our own.

It's just frustrating!  The Cap. One is the whole reason we were even doing this refi. 

We have scores 752-768, and everything else seems okay.  Fingers crossed that no other issues come up.