topic Re: Denied on FHA today...when to re-apply again? in Mortgage Loans

Denied on FHA today...when to re-apply again?

ccubedzx3 — Mon, 30 Apr 2012 21:23:53 GMT

My wife (654 credit) and myself (634 credit) were denied an FHA loan today. We had a few 60 day late's back in December of '11. The reason for the denial was due to the late payments on a student loan and C.C. and not because of our income. We have no late mortgage payments in over a year, but like I said, we have late payments less than a year old on other things, but of those items that were paid late, they are now paid off as agreed. No buyoffs. Currently our debt is as follows:

-Mortgage $1320/month $140,000 balance

-Car $225/month $4500 balance

-Car $300/month $12,000 balance

-Student Loan $150/month $30,000 balance

-Credit card $58/month $2000 balance (plan on paying off in July)

-Personal Loan $116/month $650 balance (plan on paying off in July)

Total monthly debts- $2170

Total monthly income $12,750

Debt to income ratio 17%

Even if I add our new mortgage of $2000/month we would be at 32% Debt to income level. We would be replacing the $1320 mortgage with the $2000 one, if we got approved.

Considering all the info listed, when can we re-apply and get approved?

This is very disheartening.....so upset over this...

Re: Denied on FHA today...when to re-apply again?

rckstrscott — Mon, 30 Apr 2012 21:50:20 GMT

ccubedzx3 wrote:
My wife (654 credit) and myself (634 credit) were denied an FHA loan today. We had a few 60 day late's back in December of '11. The reason for the denial was due to the late payments on a student loan and C.C. and not because of our income. We have no late mortgage payments in over a year, but like I said, we have late payments less than a year old on other things, but of those items that were paid late, they are now paid off as agreed. No buyoffs. Currently our debt is as follows:

-Mortgage $1320/month $140,000 balance
-Car $225/month $4500 balance
-Car $300/month $12,000 balance
-Student Loan $150/month $30,000 balance
-Credit card $58/month $2000 balance (plan on paying off in July)
-Personal Loan $116/month $650 balance (plan on paying off in July)

Total monthly debts- $2170
Total monthly income $12,750

Debt to income ratio 17%

Even if I add our new mortgage of $2000/month we would be at 32% Debt to income level. We would be replacing the $1320 mortgage with the $2000 one, if we got approved.

Considering all the info listed, when can we re-apply and get approved?

This is very disheartening.....so upset over this...

For FHA, from my understand and how it was explained to me, is your late payments or negative info needs to be a year old or greater.. when I was going through the process, I had a collection account (which was subsequently deleted) that appeared as a new collection on Dec 2011 and my LO indicated I wouldn't quailfy without getting it deleted until Jan 2013.

My guess is you will not be able to qualify until your lates are a year old, regardless of income.

-scott

Re: Denied on FHA today...when to re-apply again?

kjm79 — Mon, 30 Apr 2012 22:38:41 GMT

Yep. No lates within the last year. Everything else looked good. See if you can gw the lates and then maybe you can app sooner. If not, it gives you more time and maybe you can know off the smaller auto loan in the next year. Your dti is good, but every little bit helps. Or save up for more of a down payment. Sorry the bad news though, that stinks.

Re: Denied on FHA today...when to re-apply again?

How2increase — Mon, 30 Apr 2012 22:44:30 GMT

Oh no!!! That is so disappointing! Makes me nervous, I'm applying for a mortgage in a few months and my last late was in dec.2011. I contacted first guaranty mortgage and a LO there said only late payments within the last 6 months will automatically get you a denial. What lender did you apply with? Not even conditions? Just a flat out NO?

Re: Denied on FHA today...when to re-apply again?

Booner72 — Tue, 01 May 2012 02:52:17 GMT

How2increase wrote:
Oh no!!! That is so disappointing! Makes me nervous, I'm applying for a mortgage in a few months and my last late was in dec.2011. I contacted first guaranty mortgage and a LO there said only late payments within the last 6 months will automatically get you a denial. What lender did you apply with? Not even conditions? Just a flat out NO?

This is a sign that you should not get a loan from that person. FHA mandates 12 months of clean credit, regardless of who you get the loan from.

Re: Denied on FHA today...when to re-apply again?

How2increase — Tue, 01 May 2012 02:57:13 GMT

Yea when the LO told me that I found it kind of odd but I was hoping what she was saying was true. What if you write LOE?

Re: Denied on FHA today...when to re-apply again?

Booner72 — Tue, 01 May 2012 03:25:01 GMT

No LOE is going to change FHA guidelines. You either PFD or GW or wait it out. Six more months isn't that long, just gives you more time to get scores up and save. You can easily google the FHA guidelines and see if this is the only thing holding you back.

LO's talk ___ all the time to get you in the door. They say crazy things.

Re: Denied on FHA today...when to re-apply again?

SassyGirl5401 — Tue, 01 May 2012 03:48:24 GMT

I'm so sorry to hear about your denial :(

While the information in this thread is great to know, it has me incredibly nervous now about getting denied. My husband has a recent late on his credit. Looks like I'll be getting in touch with our loan officer tomorrow to see what our options are.

Re: Denied on FHA today...when to re-apply again?

GoingTo800 — Tue, 01 May 2012 04:29:49 GMT

Fha isn't the only loan program, ever consider trying a conventional mortgage?

Re: Denied on FHA today...when to re-apply again?

rckstrscott — Tue, 01 May 2012 05:02:01 GMT

Booner72 wrote:
How2increase wrote:
Oh no!!! That is so disappointing! Makes me nervous, I'm applying for a mortgage in a few months and my last late was in dec.2011. I contacted first guaranty mortgage and a LO there said only late payments within the last 6 months will automatically get you a denial. What lender did you apply with? Not even conditions? Just a flat out NO?
This is a sign that you should not get a loan from that person. FHA mandates 12 months of clean credit, regardless of who you get the loan from.

Just to throw this out there.. if the late payment is Dec 2011, and the poster was planning on apping in 'a couple months' -- the late payment has to be older than a year.. maybe the LO wasn't talking out of his/her rear.. maybe they just planned on, I dunno, an October app? Who knows

I do agree though, all LO should know the guidlines..

-scott

Re: Denied on FHA today...when to re-apply again?

rena347 — Tue, 01 May 2012 06:22:43 GMT

I am confused about this one year - no late rule that people are quoting about FHA. We just recently closed on an FHA loan and my husband had a 30 day late (on an auto loan) from August 2011. We were asked to write a letter of explanation for the late and it passed through underwriting.

Re: Denied on FHA today...when to re-apply again?

thankfulheart — Tue, 01 May 2012 07:25:25 GMT

rena347 wrote:
I am confused about this one year - no late rule that people are quoting about FHA. We just recently closed on an FHA loan and my husband had a 30 day late (on an auto loan) from August 2011. We were asked to write a letter of explanation for the late and it passed through underwriting.

My understanding is a single 30 day late MAY be permissable, but any more than that, and certainly 60 day lates must pass the 12 month mark. One reason I'm waiting until June to apply, I have a 30 day late from May 2011 and was advised by the LO to wait until then.

Re: Denied on FHA today...when to re-apply again?

ccubedzx3 — Tue, 01 May 2012 09:37:09 GMT

Good morning, and thank you all for your insight and responses! I appreciate it. We are not seeking out conventional because we don't want to put 20% down. The house we were looking at is right at $300K, so we don't want to come up with $60K.....

If I understand the responses correctly, ideally I shouldn't even reapply until January of next year just to assure the clean bill of health in regards to any lates? I would hate to keep my payment history clean, then reapply in December, just to get the big "DENIED" stamp once again because it wasn't a full year.

I am so ticked because we were offered bad advice, and were told to "create a hardship" so we could qualify for a mortgage modification on our existing house. That advice more or less created the scenario of getting denied....so frustrating.

I, by any means do not have stellar payment history, but the stuff I was late on, is/was paid in full for the full balance amount and I didn't settle with anyone. I thought by doing that, that it would help my cause, but it appears as if that didn't matter.

Oh well, I've learned my lesson, and will carry on into the future instead of beating myself up for past mistakes. Every month going forward with clean history, is indeed moving one month further from the tarnished past...Just looks like we will be putting our "Forever Home" on hold for another year...

Re: Denied on FHA today...when to re-apply again?

thankfulheart — Tue, 01 May 2012 10:31:08 GMT

ccubedzx3 wrote:
Good morning, and thank you all for your insight and responses! I appreciate it. We are not seeking out conventional because we don't want to put 20% down. The house we were looking at is right at $300K, so we don't want to come up with $60K.....

If I understand the responses correctly, ideally I shouldn't even reapply until January of next year just to assure the clean bill of health in regards to any lates? I would hate to keep my payment history clean, then reapply in December, just to get the big "DENIED" stamp once again because it wasn't a full year.

I am so ticked because we were offered bad advice, and were told to "create a hardship" so we could qualify for a mortgage modification on our existing house. That advice more or less created the scenario of getting denied....so frustrating.

I, by any means do not have stellar payment history, but the stuff I was late on, is/was paid in full for the full balance amount and I didn't settle with anyone. I thought by doing that, that it would help my cause, but it appears as if that didn't matter.

Oh well, I've learned my lesson, and will carry on into the future instead of beating myself up for past mistakes. Every month going forward with clean history, is indeed moving one month further from the tarnished past...Just looks like we will be putting our "Forever Home" on hold for another year...

I wish I had known a year ago that I really needed a full year to prepare to apply for a mortgage. No one really tells you that, do they? It's taken me several months to get my financial house in order from dealing with medical collections to getting student loans consolidated and reporting correctly, not to mention letting time pass on the most recent lates.

I would strongly recommend using the time to read over the rebuilding forums and work to clear up as much as you possible can. You never know what a GW letter might do for you.
And...OPT OUT if you haven't already. There's a website and a phone number (I'm sure you can search the forum to find it) which will keep creepy crawlies from showing up now that you've applied for a mortgage. Keep moving forward!

Re: Denied on FHA today...when to re-apply again?

ccubedzx3 — Wed, 02 May 2012 09:24:44 GMT

Spoke with our lender again yesterday, and she re-ran the numbers just based on my wife. Since we were looking at new construction, we wouldn't close until December, just about the time the late's in her name fell off. We were then pre-approved for $243K based on her income alone, but we are going to hang tight and re-apply when we both can be used towards our "Forever Home."

I plan on writing a few GW letters this coming weekend, and then from there I am going to just wait it out until February of '13 when we will have more saved up, and we will be in a better spot to buy.

A word for the wise, never ever take advice over the phone in terms of short-selling. A year and a half ago I talked to someone in regards to short-selling. He recommended that I go at least 30 days late on our mortgage and create a hardship by being late on a card or two. I followed his advice, but declined following through on shirt-selling as my conscience wouldn't allow me to do it....The big problem is, that advice cost us a chance at moving this year and now I have to deal and live with it.

All I can say is, thank you to everyone here for advice on how to best correct my situation moving forward. Hearing real advice, from real people is the best way to move forward. THANKS!

Re: Denied on FHA today...when to re-apply again?

ccubedzx3 — Wed, 06 Jun 2012 17:45:16 GMT

*Update* I finally got a chance to pen up some Goodwill letters, now I have to play the waiting game to see what happens. I want to prepare for the worst, and hope for the best.

- Currently I am at 78% utilization on my one and only C.C. with a $2700 limit. If I pay that down within the next day or two to 1-9%, how much would you expect my score to go up?

- I have a 60 day late from September 2005 showing up on my C.R. When that falls off, will my score increase at all?

- Once December hits, it will be 1 year since my last late payment on a credit/loan account, will 1 year with good history increase my score?

- Once February hits, it will be 2 years since any late mortgage payments, will 2 years of good mortgage history increase my score?

I have about 60 points I need to gain in order to hit a median score of 640...will I get there by December/January?

Thank you again all for all your help!

Re: Denied on FHA today...when to re-apply again?

UpmyscoreinFL — Wed, 06 Jun 2012 17:58:38 GMT

Paying down your utilization will get your score up the fastest. So is it tru first guaranty only requires six months clean history? I have one card holding me up and I would have six months by the time I need to buy bit not 12.

Re: Denied on FHA today...when to re-apply again?

GoingTo800 — Thu, 07 Jun 2012 02:43:38 GMT

The late from 05 most likely won't change your score.I had a 4 year late goodwilled off and got like 4 points

Re: Denied on FHA today...when to re-apply again?

ccubedzx3 — Wed, 18 Jul 2012 20:42:58 GMT

I just re-applied today, and BOOYAH!!!.......PREAPPROVED!!!! I'm so ecstatic right now!! We plan on doing a new build, so we have time to save some more cash before closing....I went from a 590 FICO on April 30th of this year, to a 640 today!! Trust in yourself, and good WILL happen!!!

Re: Denied on FHA today...when to re-apply again?

indecison — Wed, 18 Jul 2012 21:11:07 GMT

Congrats!