Loan From DVC - Reveal Or Not Reveal?

[cobbler]

Ok, I am curious.

If it doesn't show up on your credit report, how in the world are they going to find out or know? As far as I am aware of most mortgage companies don't have access to your bank transactions or records.

Can someone enlighten me on this?

 

[Doctor P]

Ok, I am curious.

If it doesn't show up on your credit report, how in the world are they going to find out or know? As far as I am aware of most mortgage companies don't have access to your bank transactions or records.

Can someone enlighten me on this?

Every mortgage for which I have applied has required three months (minimum) of bank statements for savings and checking accounts. Furthermore, if the purchase was recent, it DOES show up as an inquiry on your credit report.

 

[irish38]

I've been in the mortgage business for more than 10 years. I have done over $500 million in loans and never ever required more than 2 months bank statements. Most loans require one month statement. Many lenders will just get a one page form verification of deposit from your bank. The mortgage market has changed drastically in the past 2-3 years. If you have credit scores over 700 and reserves of at least 3 months, you can do just about anything.

If I had a client tell me they had a Disney timeshare, I would tell them to not bother listing it as an asset. If its not a liquid asset, it won't help in most situations. Most banks and lenders aren't going to throw a lien against a timeshare, even if it is Disney.

However, I would definitely list it as a debt. Do I think it would come back to bite you? Never in a million years. Could a lender call the note due if they found out you failed to disclose this? Yes. Would they? No. Unless you are late on your payment or they find out you frauded your income or assets docs, they don't look at the loans that closely.

You should list it as a debt purely because it is the ethical and moral thing to do. You sign a form called a Uniform Residential Application at application and another one at close. There is a line on the mortgage that says you have not knowingly falsified anything on the application.

You also sign a general authorization form that allows the lender to request whatever they need from your bank, financial advisor, etc.

Good luck on your new home purchase!

 

[gppnj]

I've have a somewhat funny update to this whole thread.

I just spoke with the mortgage agent I've been working with. I did the right thing and mentioned to her about the money I owe to DVC. Fortunately, it did not affect my loan eligibility. What was funny was her response. She said, "I appreciate you telling me about this, but you didn't have to. As far as I'm concerned, if I can't see it on your credit report, it doesn't exist. You just have to make sure in your own calculations that with that timesahare payment you're still able to afford the house."

I'm sure all mortgage people wouldn't be as equally blase about that, but she was.

I've been in the mortgage business for more than 10 years. I have done over $500 million in loans and never ever required more than 2 months bank statements. Most loans require one month statement. Many lenders will just get a one page form verification of deposit from your bank. The mortgage market has changed drastically in the past 2-3 years. If you have credit scores over 700 and reserves of at least 3 months, you can do just about anything.

If I had a client tell me they had a Disney timeshare, I would tell them to not bother listing it as an asset. If its not a liquid asset, it won't help in most situations. Most banks and lenders aren't going to throw a lien against a timeshare, even if it is Disney.

However, I would definitely list it as a debt. Do I think it would come back to bite you? Never in a million years. Could a lender call the note due if they found out you failed to disclose this? Yes. Would they? No. Unless you are late on your payment or they find out you frauded your income or assets docs, they don't look at the loans that closely.

You should list it as a debt purely because it is the ethical and moral thing to do. You sign a form called a Uniform Residential Application at application and another one at close. There is a line on the mortgage that says you have not knowingly falsified anything on the application.

You also sign a general authorization form that allows the lender to request whatever they need from your bank, financial advisor, etc.

Good luck on your new home purchase!

 

[DVC_Couple_PA]

I didn't tell when I bought my house and nothing happened. I was planning to just say "Opps, it gets automaticlly taken from my account so I don't even think about it" if they found out, but it never came up.

 

[Cruelladeville]

When I refinanced my house last year, I never mentioned DVC one way or the other(asset or debt) on the app. At the signing, I said, "by the way..." and I was told the same thing--if it's not on the credit statement, it doesn't exist. I said that I owned 3 timeshares that were paid off, and I was told that they wouldn't count it as an asset, either, in giving credit, since the timeshare industry is iffy, at best. I was somewhat put out at that attitude, but, hey, they were giving me the loan, so why rock the boat?

 

[mamatojon]

I've have a somewhat funny update to this whole thread.

I just spoke with the mortgage agent I've been working with. I did the right thing and mentioned to her about the money I owe to DVC. Fortunately, it did not affect my loan eligibility. What was funny was her response. She said, "I appreciate you telling me about this, but you didn't have to. As far as I'm concerned, if I can't see it on your credit report, it doesn't exist. You just have to make sure in your own calculations that with that timesahare payment you're still able to afford the house."

I'm sure all mortgage people wouldn't be as equally blase about that, but she was.

This is exactly (almost word for word, LOL) the comment my loan officer made. She even made this comment about timeshares and how if I stopped making payments they'd just take it back, like it was no big deal or something! I was a bit struck by her attitude, but she said "If you're comfortable with it, we're comfortable with it". I have to admit I was a bit nervous anyway until it was approved through underwriting!

 

[irish38]

Something to keep in mind:

If your loan officer gives you wrong advice, it does not necessarily protect you from the lender. Most loans are sold on the secondary market. If a lender buys that loan, sees a problem with documentation in the file and decides to go after someone, it is your word against the loan officer. Most will not admit to telling you misinformation especially if it means their company may have to buy the loan back. You know the old saying "S*** rolls down hill." Well you're at the bottom of the hill so protect yourself.

Always disclose your debts on a loan application. Even if it will cause extra work for you. Lenders really only look at liquid assets (Fannie Mae and Freddie Mac loans) unless they are going to portfolio the loan themselves. This may be hard to believe but owning a second home free and clear does not help much when trying to buy a new primary residence. Lenders are looking for assets that can be easily tapped into if you get in a financial pinch such as stocks, 401k's and 403b's, IRA's, checking and savings accounts accounts.

 

[mamatojon]

Something to keep in mind:

If your loan officer gives you wrong advice, it does not necessarily protect you from the lender. Most loans are sold on the secondary market. If a lender buys that loan, sees a problem with documentation in the file and decides to go after someone, it is your word against the loan officer. Most will not admit to telling you misinformation especially if it means their company may have to buy the loan back. You know the old saying "S*** rolls down hill." Well you're at the bottom of the hill so protect yourself.

Always disclose your debts on a loan application. Even if it will cause extra work for you. Lenders really only look at liquid assets (Fannie Mae and Freddie Mac loans) unless they are going to portfolio the loan themselves. This may be hard to believe but owning a second home free and clear does not help much when trying to buy a new primary residence. Lenders are looking for assets that can be easily tapped into if you get in a financial pinch such as stocks, 401k's and 403b's, IRA's, checking and savings accounts accounts.

I see what you're saying and I'm certainly not going to argue with you because really, I know you are right... having said that, I seriously doubt that this would occur, especially with today's automated world. It seems highly unlikely that out of the thousands of mortgages that might be processed/sold/whatever that someone would look that closely at mine. It was more of an ethical thing for me, and I feel I fulfilled my obligation - on a telephone application I disclosed it.

 

[Lasrnw]

I can't believe this entire thread existed about whether or not to tell the truth. If it's a debt list it on your application - mortgage lenders are not looking to NOT write loans but a good loan officer wants to protect you from getting in over your head. It doesn't do anyone any good if you can't make your payments. Clearly you are a responsible borrower if you have paid almost the entire balance in a short period of time. Best wishes with your new home!

 

[Disney Doll]

I am a dork when it comes to stuff like this. The fear of them finding out after the fact that I hid something and that translating into me not getting a mortgage and getting some sort of negative notation on my credit report would be enough to make me supply them with all pertinent information.

 

[gppnj]

I can't believe this entire thread existed about whether or not to tell the truth. If it's a debt list it on your application - mortgage lenders are not looking to NOT write loans but a good loan officer wants to protect you from getting in over your head. It doesn't do anyone any good if you can't make your payments. Clearly you are a responsible borrower if you have paid almost the entire balance in a short period of time. Best wishes with your new home!

When I started this thread, I did think it was an issue of whether or not to tell the truth. However, after talking with my mortgage officer, I've learned that it's really more an issue of determining what a particular company considers to be debt.

Every month I have a phone bill that I must pay. However, I knew even before I started this process that mortgage companies aren't interested in this and do not consider it to be debt. Even though the phone bill is real and I do shell out money every single month for it, the mortgage company isn't interested in knowing about it.

I've learned that it's the same thing with DVC. My mortgage officer explained to me that they only consider debt to be what shows up on one's credit report. Therefore - and she explicitly said this to me - she isn't interested in knowing about the money I owe to DVC. (She even E-mailed me later and said that she had checked on this with her boss just be be 100% sure, and he confirmed it.)

There's a chance that I'll be filling out an application with this company within a few weeks. Will I list DVC as a debt? No - but only because the company has already told me that they do not consider this to be debt. I did ask her about it, so my conscience is clear. Is the money I owe to DVC debt according to the dictionary's definition of the word "debt?" Yes. However, so is my phone bill. But in this specific case, it's the mortgage company's definition, not the dictionary's, that concerns me.

Does this mean someone else should do the same thing? Maybe and maybe not. Just because the company I'm working with doesn't consider the money I owe DVC to be debt, that certainly doesn't mean that a different company would feel the same way. If for some reason I found myself working with a different company instead, I'd do the same thing I did this time: Explain the situation and ask them if, by their criteria, I should list my DVC loan as a debt. If this new company said that they do consider it debt, I certainly would list it.

 

[gppnj]

Epilogue: I closed on Friday!

 

[vascubaguy]

Epilogue: I closed on Friday!

Congratulations!!!!

Ironically, my best friend closed on his home purchase on Friday too! (Musta been a good day for a closing)