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Paying Off Cards Before Closing

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Regular Contributor

Paying Off Cards Before Closing

So the contract states a closing date of March 31st. It also has an automatic extension set until April 6th. The LO dropped the bomb yesterday saying the lot is "undersized" and he will need a waiver from the HUD for the new septic. He claims 100 percent of the responsibility for not addressing this sooner and says he will pay the 50 dollar per day penalty. He recommended an extension "on or before" the end of April. This is a Freddie Mac Homesteps property with a 203K loan. 

 

Like normal I have been putting all of my expenses on my credit cards. I always pay them down before the statement cuts (10th and 20th). I've spent more money this past month then normally (fixing the heater, pipes, water test, new tires on my car, ski trip...). Since I was hoping to close in early Aprli I figured I would pay my cards after closing but before the statement cuts. Now since closing is being pushed back I'm forced to make a payment decision.

 

1) Pay the cards off from my checking account

2) Borrow some cash and go to the local bank where my one credit card is issued from and make a cash payment.

 

If I borrow the money they potentially won't see the abnormal high spending but also it would look like I haven't spent anything at all this month. If i just pay my cards off with my checking account it will appear I'm overspending although some of the purchases are for getting the house ready for closing.

 

3) Borrow some cash and pay the cards down some and then pay the rest with the checking account.

 

im probably overthinking this. I have about 2500 dollars invested into this house I don't own yet. I don't want to loose the house.

 

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3 REPLIES 3
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Established Contributor

Re: Paying Off Cards Before Closing

I'd pay them off from my checking account.

Message 2 of 4
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Regular Contributor

Re: Paying Off Cards Before Closing

we are in the same situation. My closing was moved from 31st March to 17th April and  I have been livng off my credit cards.So end month, i plan to pay the full balances using cash borrrowed from my sister. I already have closing costs ready.

 

its a gamble depends on if your loan officer wants to see your credit cards..statements.

Message 3 of 4
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Regular Contributor

Re: Paying Off Cards Before Closing

Thanks for the replies.

 

The funds are not a problem on my end. I have the Downpayment, closing costs and plenty of reserves. My concern is that if/when they ask to see my updated bank records I will be around break even for the month when in general I am positive 1500 per month. I could explain and show some of my expenses went towards the house. I technically am in the exact same financial situation now (after paying the cards) as I was when I applied. However my trend flattened out this month. 

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