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Long one...Loan rehab, credit cards, expenses.

New Member

Long one...Loan rehab, credit cards, expenses.

Hello all, I spent over an hour searching the boards and web for an answer to the question: are credit card payments an acceptable expense for an expense detailed rehab agreement?

I found 1 post that said 1 CA took it as an expense and another CA didn’t.

I attempted to rehab my loans a few years back and the CA-pioneer- tried to get me to pay $1300 on a balance due of $8000 or so. I couldn’t have afforded it, so I declined and waited.

Now I’m trying again with Coast. Current payment offered is $180-which I can afford. Paperwork is being faxed today with pay stubs and other supporting documentation. My concern is that because I’m making very high payments to my Credit cards they will come back saying I should only be considering the minimum payments.

My spouse and I are pushing hard to get a mortgage in 6 months and we want the FHA option open. I know it’s not a certainty with an incomplete rehab, but I thought if I was 6 months in it would be a possibility, depending on the lender.

Logically, CAs should NOT accept credit cards payments as an expense, because you could potentially live off cards and inflate your expenses unnecessarily. But it is a payment we have to make and I’d like to stay on track to have our Utilization below 20% by April or so.

Anyone with loan rehab have thoughts or experience?
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Regular Contributor

Re: Long one...Loan rehab, credit cards, expenses.

I have been told by every mortgage broker that I have worked with that FHA will not finance you if you have federal student loans in default.  Their perspective is, "if you defaulted once on federal money, what is to say you will not default again".  


Now, if you go to the mortgage thread, you may read otherwise from time to time.  However, a signficant determining factor isn't what you read on the message boards, but how the broker & underwriters interpret that.


In closing--you said you wanted to buy within 6 months--an extra three months on top of the 6 & you will have completely rehabbed loans.


Good luck!

My FICO Scores:
9/17: EQ - 542 / TU - 535 / EX - 506 // Mortgage: 553, 545, 486
10/ 17: EQ - 558 / TU - 563 / EX - 586 // Mortgage: 554, 568, 536
11/17: EQ - 630 / TU - 589 / EX - 614 // Mortgage: 606, 606, 572
12/17: EQ - 630 / TU - 624 / EX - 619 // Mortgage: 584, 612, 671

Journey Milestones: Completed Federal Student Loan Rehab in Sept 2017. Settled First Premier Bank CC in August 2017. Constant uphill battle with Navient incorrect reporting on seven (7!) private student loans. No TLs listed in delinquency. Obsessively keeping 2 CC UTI @ 7-9% monthly.

End Goal: Pre-Approval for FHA Spring/Summer 2018
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