I got a letter from my Bank saying i'm pre-approved for higher LOC limit thn i already have. but my friend said not to take more LOC as it will effect when i will apply for Mortgage..is it true?
how much will it effect. can i accept the offer now and then lower the limit when i need mortgage..any suggestions...thanks
-----------------------------------------------------------------
__________________________________
Inderpal Singh
Sorry - yesterday was the deadline for all complaints
___________________________________
Quote:
Originally posted by yanksingh
I got a letter from my Bank saying i'm pre-approved for higher LOC limit thn i already have. but my friend said not to take more LOC as it will effect when i will apply for Mortgage..is it true?
how much will it effect. can i accept the offer now and then lower the limit when i need mortgage..any suggestions...thanks
If you utilize then some time mortgagor can ask to pay you the LOC. Some mortgage companies do it others do not care. When I applied for my mortgage, CIBC told me pay off my LOC and credit cards. They did not budge though they said you can draw it again next day after my mortgage papers are signed.
I went to my own bank and told them CIBC has given me better rate. My bank matched and it was unconditional.
CIBC came to know and sent me a letter that they have removed all conditions but it was too late
ohh..well i'm not using it yet. it's just for those crunch times when you need quick cash.
-----------------------------------------------------------------
__________________________________
Inderpal Singh
Sorry - yesterday was the deadline for all complaints
___________________________________
if its at a good interest rate, i would say go for higher limit. When you are not using it, it reflects that way on your credit report that you are not using it, I haven't faced a problem getting a mortgage because of LOC.
I had also heard same thing from other people that when you go for mortgage you need to reduce limits...so i was prepared for that, but no one questioned so i am keeping it for the same reason....just in case
-----------------------------------------------------------------
Pooja
What i understand, if you have your LOC, that means its your liability to pay. Better ask your bank may they will help you out.
2 cents from myside.
Quote:
Originally posted by yanksingh
ohh..well i'm not using it yet. it's just for those crunch times when you need quick cash.
It is possible that this thought might slowly translate to "I have it, so I might use it".
If I don't need it, I won't take it. But that's just my thought.
Few weeks back a friend has this crap. He was pre-approved well in advance. But after the closing, his bank "realised" that he had some LOC balance. So, the bank raised his mortgage rates!
Usually, LOC is not considered in the mortgage process - IF you have not used it or you have paid it off totally.
But keep in mind, in current bad times banks need reason to deny a mortgage or to give a higher rate. And LOC is like an open window toward more debt. Use with care.
Location: carl sagan's universe
Posted on: 12-03-09 04:55:30
Quote:
Originally posted by yanksingh
I got a letter from my Bank saying i'm pre-approved for higher LOC limit thn i already have. but my friend said not to take more LOC as it will effect when i will apply for Mortgage..is it true?
how much will it effect. can i accept the offer now and then lower the limit when i need mortgage..any suggestions...thanks
As a general rule of thumb, the limit on your LOC has no bearing on your mortgage, only the amount used on it.
If for instance your limit is say $15,000 and your utilization is only $3000- $4000, then what counts is the latter not the former.
Also if you have been paying your mortgage religiously on time, then there should be no reason that your bank will even care about your LOC unless there are some red flag signals.
