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can you use a credit card to pay a down payment on a home

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Cash Advances for Home Down Payment

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Cash advances are unsecured funds and typically cannot be used for the down payment to buy a home.  You may be able to find a portfolio bank/lender that has non-conventional mortgage programs that will allow cash advances for a down payment, but be prepared for some challenging qualification hurdles.  Keep in mind that non-conventional mortgage programs typically require larger down payments and carry less than attractive credit terms.

If you're insistant about using cash advances and want to avoid scrutiny from the creditor, and possible outright denial of your mortgage application, take your cash advances at least two bank statement cycles before applying for your mortgage.  What this means is that your down payment funds must have been seasoned (parked in your bank account) for at least 60 days (or two complete bank statement cycles) before using those funds for the down payment.  In other words, the cash advanced deposits don't show up on either of your last two months bank statements.  If you apply for a mortgage before the cash advances have been seasoned in your bank account, the mortgage underwriter will see the deposit(s) and require you to document where the funds came from.  Once you document that the source was from cash advances, your mortgage application will likely be denied.  Can you get around documenting the source of funds?  No, failure to comply with the underwriter's credit conditions will result in denial of your mortgage application.

Taking credit card cash advances for a down payment is not wise and most financial experts would go as far as to say that doing so is financial suicide.  Even using credit cards with an introductory zero interest period can still be a recipe for disaster.  Also, keep in mind that exceeding 30% of your credit limits will lower your credit scores, reduce your chances for better credit terms, and even eliminate your ability to qualify for the mortgage.  If you're short on cash for a down payment, seek out a housing counselor that is approved by the US Department of Housing and Urban Development (HUD) to discuss your options.  One of the options they can discuss with you is obtaining a gift from one or more family members.  An FHA mortgage, for example, will allow the minimum 3 1/2 percent down payment plus closing costs to come from 100% gifted funds.

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Yes, depending on your mortgage lender. ChargeSmart is a third party website where you can use a credit card, but there's at least a 2.5% fee for doing this. Any rewards are probably going to be negated by the fees. I would only consider doing this if you can't pay your mortgafe on time and don't want a 30 day late or more to drop your credit score. Your credit card should never be used on a consistent basis for the purpose, and don't forget you will also have the credit balance and possible fees and interest to pay also. 

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