Multiple loan applications

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Multiple loan applications
Posted by: Sharon Mar 11 2004, 01:55 PM
First, my question: Can I apply for a boat loan and a home equity loan at the same time without ruining the chances of getting one or the other?

We are already approved for the boat loan. We need only sign on the dotten line. This is an RV loan. I guess similar to a second home. The only thing holding us back is the weather… we have to wait for the lake to melt so we can test drive the bugger.

We have a lot of credit card debt and after close examination of our finances, we determined it would be beneficial to consolidate that debt into a home equity loan. That would leave us with a mortgage, home equity loan, boat loan, small auto loan and student loans that are almost paid off. Not a bad picture.

Other than debt to income ratio, we have excellent credit. With the new boat loan we will be borderline at 35-36% debt-to-income. If we get the equity loan, that will drop us to 28-29%. It seems like a no-brainer.

Should I go ahead and apply for the equity loan before the boat papers are signed? Or should I wait until after the boat papers are signed? Will one affect the other being so close together?

Thanks for any advice you can give me.
Posted by: loanuniverse Mar 11 2004, 08:39 PM

Ok here is what I would do where I in the same situation. This does not mean that it is the best way to go.

I would apply for the home equity now.

First, the boat loan has already been approved. While there is a remote possibility that your application for the home equity loan might affect the approval, which you already got. The probability pf an adverse effect is negligible. In addition, once you are approved the lender will probably won’t be running a check again.

Second, the new home equity will probably help you out by consolidating, this means that by the time it gets closed, your debt-to-income would look even better.

The only thing that I would say is to be honest when it comes to filling out the home equity loan application. No reason not to be truthful. The good thing is that applications rarely require further information than the assets and liabilities at the time of the application.

Ice melts up north about the middle of April, right? You can close on a home equity loan in a week, so you still have time.

Hope this helps.
Author: Commercial Loan Underwriter