What Is a FICO Score and How Does It Affect Your Mortgage Loan
Question
can we take a credit card balance transfer for lower rate and take less money for mortgage?
ok, we are planning on buying a house and our fico scores are above 700. right now the interest rates are around 6 % or so. my question is can we get a loan pre approved, get the money funded or whatever and then go back and say we dont need the full amount but we need (like 20,000 dollars or less)? the logic iam looking at is if I take good APR rate on balance transfer before I get preapproved that migt affect my FICO score, however if I get preaprroved and my loan funded, THEN get some money from the credit card for a good rate like say 2.99 % APR or soa nd the go to my mortgage bank and say i dont need all the loan money, I need $20k less assuming I take $20K from my CC as a balance tx for a lesser rate, in that i can get a good rate on my loan and at the same time my fico score wont effect my mortgage rate anymore coz its alreayd funded? any experts please
1 year ago - 6 answers
Best Answer
Chosen by Asker
not a good idea. first, your credit history will be monitored up till the time of purchase. If you have 20K in revolving credit cards, they will either not fully fund your application, or they may even reject you. They are looking at your debt load, and your ability to pay. Having a $20K obligation questions your ability to pay your mortgage. second, those low rates on credit cards can be tricky. often times those rates they give you are teaser rates. They will probably go back to their normal rates after a certain period. then you'll be paying 2 or 3 times more than your mortgage rate. third, the interest you pay on your revolving credit is not tax deductible. If you pay interest on a home mortgage, you can at least claim that for your taxes. The point is this.... youre still gonna be in debt 20K either way, and unless you can pay it off quickly (within a year), you might as well just put that debt under a long term mortgage. It would be safer that way.
by oliver k
1 year ago
Asker's Rating: 
Other Answers
A bank is not going to give you a mortgage loan without an actual piece of property being purchased. You get the money at closing, not before.
by Angie- 1 year ago
Then you have a $20K unsecured debt on your record, which the mortgage lender will not like. You might blow the loan approval completely.
by src50- 1 year ago
You scheme would not work. When a lender approves the loan, they don't give you the money. They simply pay the seller off and the total amount of your mortgage would not change. If you said, you didn't need a portion of the money, your mortgage would be cancelled since it's not enough to pay off the seller for the price of the house.
by Kay- 1 year ago
I just want to know where you are going to get a credit card for $20,000K with a 2.99% APR for more than 6 months! But this won't work anyway. Frankly, it would not be in your best interest to be paying two loans. That would really hurt your score more than anything else. I would just get the home loan, then you can have the cards available in case of an emergency.
by Meghan- 1 year ago
You are trying to make it way too complicated and may end up shooting yourself in the foot. Those low rates on credit cards don't last long and that indebtedness will make it hard to get a loan. They rerun your credit before funding your loan.
by Sharon T- 1 year ago