Reston, VA · Member since 2017 · 7 posts · 0 votes
Hi
Looking to do a refi on a "primary" residence possibly pull out equity to pay off debt and lower the interst rate from 5% to hopefully below 4% via credit union.
Is it better to have say 10K in an account or use the 10K to pay off some of the debt prior to applying for a refi assuming good credit?
Lender · Winlock, WA · Member since 2013 · 1k+ posts · 1k+ votes
8y
As they say, cash is king.
Keep the money in the account. If the loan officer sees that the debt ratio is to high after paying debts off through the loan, they can then apply the cash you have in the account. If it doesn't get used then its good for reserves, which is a better scenario.
Keep it in there until you are told it needs to be used as part of closing?