Closing on house/mortgage question

[mollybrown]

Now that we're in the home stretch, my mortgage person is being pretty much useless. I asked her the following question, and her response just makes no sense.

We're closing next week on a house. I've tried to limit how much we've put on the credit cards for the last few months, but there just hasn't been any way around certain charges. DH had to pay for some plane tickets and hotel stays for work trips coming up (naturally he waited until the last minute, right before we close on a house :@ ). Does it matter if we have those balances on the cards with the money in the bank, vs. paying off those balances and having less cash in the bank? We haven't been reimbursed for those expenses yet, so I don't want to pull money from savings to pay the cards off now unless it will actually make a difference.

[sarahbear]

Howcmuch are you talking about and how tight are your finances? If you have plenty of money in the bank and good credit scores it won't hurt you to have those charges. If you are barely affording this house then, yes, it will look bad either way.

[madringal]

In my experience, it doesn't matter if you use credit that you already have, what your lender does not want to see is you applying for new credit. Your DTI is typically figured as if all your available credit is maxed, because in theory you can max out all your cards the day after you close.

[dawnyp]

If it's credit on cards that previously existed there is no need to worry about. If it is a recently opened card that could be a problem. Having the cash on hand at closing is always better. Banks generally look to see how much cash is available and if there were any recent loans, credit cards, etc taken out.

[mollybrown]

Thanks madringal and dawnyp! These are existing cards, so I'll stop stressing. I definitely won't be opening any new lines of credit. I'm not sure why my mortgage person is confused. You'd think she'd be answering this question all the time.

[Pom]

Congrats on being in the home stretch. Hopefully it all goes smoothly and your are settling in to your new home soon!

[mollybrown]

Thanks Pom. Fingers are crossed!