paying credit cards

[housejunkie81]

I recently sold a car for 9000 cash and am currently in the mortgage process i dont want to raise any alarm bells with the mortgage. since i have about 22000 in credit card debt can i just pay the credit cards off with the cash without depositing it into my checking account, will the lenders want to see how the credit cards were paid off? 

[RSX]

Yes use that money to pay down the cards - you should list them out here with their outstanding balances and their Credit Line amounts, so that we can suggest what method would have the biggest impact on your scores

you should be free to tell the lenders that you sold a car and got money to pay down CCs - it is not a bad thing  - no need to be kept secret

[Mortgage-Specialist]

Bring this up directly to your LO. Buyers have done this before to get a score increase to help lower the interest rate. So in the case where the lender sees cred cards paid off, they'll want to see a paper trail of it

[ShanetheMortgageMan]

Underwriters need to document how debt is paid down/off, to make sure the funds were from an eligible source or to document if the funds to pay them off came from a new debt you took out.  The exception is if a brand new credit report is pulled and the balances already reflect the lower amount, then since it's already on the credit report then underwriters no longer ask to document how it changed from one report to another, since the new report is the only one being included when the loan is sold.  Ask your loan officer about that workaround though, but it's worked the times we've tried it.  The other option is to use that cash for your normal expenses (food, gas, utilities, and rent even unless your underwriter is asking you to document rental payments) and then your regular bank account balance won't deplete as quickly, allowing you to use the funds in your regular bank account to pay off those credit cards (since you'd be able to document those).