Financing in 13021>Question Details

ndan, Home Buyer in Auburn, NY

Loan against 403b and obtaining new credit: Did I mess up?

Asked by ndan, Auburn, NY Thu Jun 6, 2013

I have a seller credit for $2500, but this amount cannot show as funds required for cash to close. Therefore, I'm short $2500 for cash to close condition. How is taking a loan against your 403b different than applying new credit? I might have made a bad call when I actually DID apply for a loan from my credit union, thinking that I will give it to a friend and deposit into my account as if it's a "gift". With the timeline of credit report pulled a month ago, underwriting started and completed 4 days ago, and now need to see funds in the account within a week....I'm wondering if they will pull my credit report or able "catch me with my new loan"?

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Count on it! We lenders will always pull a "Refreshed" credit report prior to funding. So you can go all the way through the process until the very last minute and have the carpet pulled out from underneath you. I encourage you always be straight with your Loan Officer. When you signed an application, and subsequent forms, you were warned about not disclosing your debt. That's loan fraud and I can assure you, it's serious business now. My recommendation is contact your LO and tell them of the new debt, the only thing you have to worry about is being able to qualify with that new payment and to show the paper trail of those funds to close. Just my opinion, good luck with your decision.

Best Regards
0 votes Thank Flag Link Thu Jun 6, 2013
Thank you for your response. I was wondering the impact of secure loan vs. unsecure loans? My LO suggested to take a loan against my retirement and in subsequent email to liquidate my retirement account. The processing time to get that IRA loan is longer than the deadline allowed, and the secure loan from my credit union is faster to get. I filled out the application, but there's no option for secure and unsecure. I wonder if by filling out the application, a credit report was pulled (and if so, I can always decline the loan...)...So now, the outstanding question is: Will credit reports show a secure loan (since I'm borrowing from myself? is this a better option or is borrowing a loan against my 403b better? I feel a bit embarrassed asking my LO if I can take out new loan, and he said "no" and I went and applied anyways thinking I was slick..ha!
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