topic Re: What a mess! Do you think we'd qualify? in Mortgage Loans

What a mess! Do you think we'd qualify? UPDATED 10/13

Panda2108 — Sat, 13 Oct 2012 19:47:53 GMT

This could stand to be a fairly long post. Apologize in advance. Trying to figure out if we'll qualify for a mortgage. Any help would be greatly appreciated!

1st, my fiance (we'll be married by closing) is in the Marine Corps and his enlistment is over at the end of April next year. We're going to use the VA loan and go through Navy Federal Credit Union. My future Hubby has absolutely no baddies on his credit report, not even a single 30 day late. Initially, we applied and got preapproved with just him on the loan (because I thought my credit was TERRIBLE and didn't even want to attempt.) We found an AMAZING deal on a house. 1175 sq feet with an unfinished attic that could almost double the sq feet if finished, 11.9 acres, built in 2002 and only 89k. Needs paint insisde, but in decent condition otherwise. We made an offer and it was accepted, and we got the house under contract. 2 days later, we get a call from Navy Fed that because my FH doesn't have income for the next solid 12 months (no job lined up after he EASs from the military), we wouldn't be able to get the loan.

Enter Me: Same job for 2 years. I make 1820 but regularly work OT. 520 hours of it last year (on tax return), on track for the same this year. My credit pull came back with scores of 619, 642 and 658. Not great, but not as bad as I thought they would be. They said they'd have to send to UW. This is what we found on the report the LO sent me:

BADDIES:

CA for a rental that I had in 2008 on all three CB reports: $201 for painting and stuff after I moved out. They forwarded to an incorrect address. I called and paid this IMMEDIATELY after receiving the report and received a deletion letter for it that I forwarded to my LO.

CO on a CC from 2006 on all 3 CBs: Says Settlement accepted on this account, legally paid in full for less than full amount. ($869). I wrote the explanation that i had been young, immature and was not aware of the importance of proper money management. (I was 19 at the time, and totally ignorant about how important it was.)

CA from a cable bill for $44 on XPN and EFX with a DLA of 11/2006: I have tried to take care of this multiple times but suddenlink has "changed systems" and cannot even tell me what it's for or take any kind of payment.

CA from a phone bill for $78 on EFX. DLA of 7/2006: Calls to the phone number given here result in VM and not being able to get a call back. I have disputed this charge because I never had a landline phone.

CO from Continental Finance (CC) for $300 on XPN and TU. DLA 1/2008: I wrote in the explanation that I do not know where this account came from and all of my calls to the number provided have said the number is disconnected. I did read on these boards that FBoD and CF were involved in charges from the FDIC for shady business practices, and sent an email to my LO about it with the explanation. I'm not sure if I should go ahead and dispute this to have it removed or not. I have heard that while you're in UW you shouldn't mess with your credit report at all in case you risk messing something up.

I have a personal loan that I've had for 2 yrs with NF and I've never been late on a single payment. Payment amount is 119 a month.

I also just took out a 6 month loan for 650 dollars, but have advised the LO that I can pay this in cash prior to closing if it adversely affects my DTI. Payments on this are 155 a month.

I dont have much other positive on my credit report so I also sent my LO records of paying my rent of $529 a month for 2 years with no lates and of my insurance of $120 a month with no lates.

So what do you think our chances are of getting approved through NF? If we aren't approved through them, should I try someone else?

Re: What a mess! Do you think we'd qualify?

tooleman694 — Wed, 03 Oct 2012 21:52:42 GMT

I think you will do fine. everything adds up.

Re: What a mess! Do you think we'd qualify?

luckelle — Thu, 04 Oct 2012 00:05:08 GMT

Really looks promising to me. You have solid explanations and such. I would say Good Luck, but doesnt seem to be needed here. So, God speed!

Re: What a mess! Do you think we'd qualify?

Panda2108 — Fri, 05 Oct 2012 00:43:20 GMT

*update*

We were denied! While my credit scores were within parameters, they weren't as high as they'd "like" to see them.

ARE YOU KIDDING ME? I had a feeling this was going to happen simply because my Loan Officer seemed completely disinterested in even communicating with us to start with. After taking a 4 day weekend and returning on Tuesday, I called him WEDNESDAY about the deletion letter I had emailed him MONDAY and he said "Let me look, I haven't checked my email." WHAT? And a pull after deletion probably would have improved my scores by at least a few points, if not more. If he had forwarded the letter to the UW like I asked him to, it would not have been an issue. UGH! So frustrated!

Anyway, my realtor suggested we go with a local mortgage company so we're gonna give them a shot. I submitted all my stuff tonight, and I'll be giving him a call once he's in office tomorrow. My FH and I REFUSE to give up!

Wish us luck!

Re: What a mess! Do you think we'd qualify?

beb86 — Fri, 05 Oct 2012 02:43:37 GMT

If you have at least 3.5% to put down I would try FHA over VA you will pay more in closing cost with a VHA I mean @ 0% down the will get there money somehow. My scores or at least my middle score was similar to yours and I was approved just fine. We used 5/3 as our LO. Hope this helps!!!!

Re: What a mess! Do you think we'd qualify?

Panda2108 — Fri, 05 Oct 2012 03:14:11 GMT

Unfortunately, we don't have 3k in savings. Once we're married (at the end of the month), we'll be able to save up that much easily in a couple of months, but right now it's not in the finances since we're living apart at the moment since he's in the military. Our seller is paying 1500 of the closing too.

I'm just worried that in the wait to save up 3k, this perfect opportunity of a house will be sold. This house is actually the whole reason we considered buying in the first place. It's not a starter home, a family home, or a retirement home....it's all three in one with more space and potential than anything we ever hoped to find. I have applied at a local mortgage company tonight and will be going up there tomorrow to meet with the loan officer in person. The over the phone stuff with a loan officer that I never meet is for the birds. I want to look them in the eye when I lay out all our stuff and assure them that we are ready financially and mentally for home ownership. We may not have much in savings now, but my financial plan has us with at least 6k in savings by April, and that's IF I dont get the promotion that I'm up for at work. If I get it, it'll be more like 8 or 9k.

We had considered FHA as well, but our savings at the moment arent enough. I thought about a 100% USDA loan, but I've heard the funding for that is pretty lengthy and difficult to get. Any thoughts on those?

Re: What a mess! Do you think we'd qualify?

Elcid89 — Fri, 05 Oct 2012 04:03:46 GMT

beb86 wrote:
If you have at least 3.5% to put down I would try FHA over VA you will pay more in closing cost with a VHA I mean @ 0% down the will get there money somehow. My scores or at least my middle score was similar to yours and I was approved just fine. We used 5/3 as our LO. Hope this helps!!!!

VA is preferable to FHA. The funding fee qualifies as a qualified mortgage insurance premium (even if rolled into the loan) and is 100% deductible on your tax return. It's one of the few instances where PMI is deductible.

Re: What a mess! Do you think we'd qualify?

Elcid89 — Fri, 05 Oct 2012 04:09:29 GMT

Panda2108 wrote:
Unfortunately, we don't have 3k in savings. Once we're married (at the end of the month), we'll be able to save up that much easily in a couple of months, but right now it's not in the finances since we're living apart at the moment since he's in the military. Our seller is paying 1500 of the closing too.

I'm just worried that in the wait to save up 3k, this perfect opportunity of a house will be sold. This house is actually the whole reason we considered buying in the first place. It's not a starter home, a family home, or a retirement home....it's all three in one with more space and potential than anything we ever hoped to find. I have applied at a local mortgage company tonight and will be going up there tomorrow to meet with the loan officer in person. The over the phone stuff with a loan officer that I never meet is for the birds. I want to look them in the eye when I lay out all our stuff and assure them that we are ready financially and mentally for home ownership. We may not have much in savings now, but my financial plan has us with at least 6k in savings by April, and that's IF I dont get the promotion that I'm up for at work. If I get it, it'll be more like 8 or 9k.

We had considered FHA as well, but our savings at the moment arent enough. I thought about a 100% USDA loan, but I've heard the funding for that is pretty lengthy and difficult to get. Any thoughts on those?

Best advice - you are not ready to pursue a mortgage. VA will allow you to roll the funding fee into the loan, but by the time you get finished with closing costs and all the prepaids, you will still need to have several thousand in liquid cash to close, and you are going to want to be able to demonstrate 3 to 6 months of reserves post closing, lest you find yourself in a mess. VA appraisers are also notoriously picky and have been known to derail more than a few deals.

Take some time, clean up your credit and work on saving, then try again in 6 months to a year.

Re: What a mess! Do you think we'd qualify?

Panda2108 — Fri, 05 Oct 2012 04:49:21 GMT

@ Elcid: While I appreciate your advice and opinion, I feel that you're incorrect. 4 years ago, I helped a friend through the process of closing with a VA mortgage (he was deployed and I had to use POA to make offers/sign his papers). He literally had maybe 400 dollars cash on hand besides the 500 for the earnest money. He ended up paying 400 for a home inspection, about 70 dollars for a termite inspection and that was pretty much it. Sellers paid the closing as well as paying for a home warranty.

Unless the VA loan fees/process has drastically changed, I just can't see how we're not ready. The reason our savings is depleted is because we were preparing ourselves for the home-buying process. We paid down debt, PFDd a few items and also paid to break my apartment lease so we could live together near his duty station.

I could see us needing a lot of money if we were looking for a house that was 150k or more. But this house is 89k. Seller to pay 1500 in closing, which from the calculations I've been given by the realtor should just about cover it for this loan. I was paying 529 for my apartment by myself with a 300 utility bill. This house is energy efficient and only 10 years old with a 1 year average electric bill of a whopping 109 bucks and a proposed PITI of 583 a month. I have virtually no other debt. I understand that the costs of maintaining a house are more than renting, but in all the number crunching I've done, I just can't see how we're not financially in a decent place. We may not have much in savings now, but within 2 months of getting the house we will have at least 3-4k in savings, after deducting the costs of moving and everything else.

I know we're ready, I just have to make the lender see it!

Re: What a mess! Do you think we'd qualify?

Elcid89 — Fri, 05 Oct 2012 04:59:17 GMT

Your seller has offered $1,500 towards closing. You are facing, at a minimum (and this assumes that you roll the funding fee into your mortgage) out of pocket:

Appraisal Fee

Credit Report Fees

Flood Determination Fee

Settlement Fees

Lender's and possibly Owner's Title Insurance

Deed Recording

City and/or County Tax Stamps

Recordation Tax

Attorney Fees (if you choose your own, or the contract splits the cost)

Agent Commissions (if you use your own agent or the deal specifies split costs)

They are also going to make you prepay interest for the month of closing upfront, prepay your homeowners insurance for at least 6 months and pay the calculated due balance of the property taxes for escrow (which can be up to 6 months of property taxes upfront). After you've paid all of that, you still have to be able to fund moving and setting up utilities (deposits) and have some sort of reserves set aside.

I'm not trying to criticize you. I'm trying to get you to take off the rose colored glasses and take an objective look at what you are getting yourself into with very limited resources. I'd ratther see you wait and be in a strong position to buy than put yourself into an overextended mess because you just have to have that "perfect" house. I'm trying to be on your side here.

Re: What a mess! Do you think we'd qualify?

Elcid89 — Fri, 05 Oct 2012 05:01:35 GMT

Have you not been given a goodfaith yet from the lender with your estimated closing costs?

Re: What a mess! Do you think we'd qualify?

Panda2108 — Fri, 05 Oct 2012 05:44:43 GMT

I had a nightmare of a time with Navy Federal. Originally, I wasn't even supposed to BE on the loan. My FH was going to get it by himself until they informed him that because he's getting out of the military in April, they couldn't use his income. I got thrown on the loan because my DTI is extremely good and my pay is steady with tons of steady OT. I worked 520 hours of it last year, and am on the same track this year according to my pay stubs.

But Navy Federal hasn't really done anything by the books. I'm convinced our loan officer was a complete QUACK. He couldn't answer 1/2 my questions, I had to pester him by phone to get him to check his email and even address my questions (I would wait 2 days after sending the email to call!). The very FIRST thing we told him was that we were going to be married before we could close (since our wedding is this month) and that we could then qualify for the VA loan using my income. He supposedly submitted our packet to UW on Wednesday of last week. When I called on Monday to check in, he was conveniently not there but another LO told me that our package hadn't even been submitted and he submitted it for us. Then earlier today, the UW kicked it back to our LO saying that we didnt qualify because we weren't married. Should that not have been included in the original packet that was sent, since it's one of the very first things we disclosed to him, and certainly the backbone of our whole packet being VA? Not to mention the most recent deletion letter that once the item falls off my CRs my scores should increase hopefully by at least a few points. Anyway, the LO sent it back to UW with an explanation, then less than 2 hours later it was denied because they said while my history looks decent, DTI is good, and my scores are within parameters, the scores aren't as high as they'd "like". I've heard that NF is notoriously difficult to get a mortgage through anyway.

I've read good things about the new guy we've applied with and his company, so hopefully we'll hear something.

As far as a good faith estimate, I have not even heard that mentioned in this whole process, though my realtor used to work for a bank and assured me that for the price, location and other factors, our closing should be right around 1500. The house is outside city limits, and not in a flood zone. I dont remember my friend having to pay 6 months of insurance or balance of the property taxes either, unless that was somehow rolled into closing. I never wrote checks for those two things.

Honestly, the idea of paying 200 or so dollars more to rent in the area drives me nuts, and for an apartment too, not even a house. To rent a house it costs pretty close to double what we'd pay for a mortgage. I know that there are maintenance costs for owning a home, but if it means that for the next few months I have to work some OT, cut back on shopping, and eat cereal for lunch a few times...I'm ok with it. It's all worth it in the end, right?

Besides, the next 8 weeks I have 24 hours of OT every weekend cause a girl is on maternity leave. That'll give us a nice bump in income to throw in savings. The moving part is taken care of, and the utility fees are being paid for as a gift by the radiologists I work with. They offered, who am I to say no??

I appreciate your advice and concern, I really do. It's sound advice, and I should probably follow it. But I'm stubborn, and have yet to get myself in over my head. I'll run myself into the ground with OT and part-time jobs and second hand everything before I let go of something that I want. But my fiance and I have decided that if we can't get it through this mortgage company, we're going to take your advice and let it go, wait a bit, then give it another shot. I just really, really, reeeeeally hope it doesnt come to that!

Re: What a mess! Do you think we'd qualify?

Elcid89 — Fri, 05 Oct 2012 05:59:58 GMT

Well, I've said my obligatory fatherly message :smileyhappy:

If it were me, I would have walked away from the deal while I still had my recoupment of earnest money intact from the denial.

You need to tell your lender than you want to see estimated closing costs. The real numbers at closing will go up or down from there depending on which day of the month you close, but it will give you a "you need to be prepared to write a check for this amount at closing" ballpark to plan for.

Your friend's loan, unless I am mistaken, was seller paid closing. He would never have seen these fees or had to pay them, because the seller paid them for him. Any lender is going to make you prepay homeowners / hazard and estimated property taxes into escrow at closing.

Get those numbers from your lender. NF should have given you one the first time that you sat down with them. Never, ever do a mortgage over the phone. Bad bad bad bad idea IMO. It leads nowhere happy and will make you want to shoot people.

Re: What a mess! Do you think we'd qualify?

Panda2108 — Fri, 05 Oct 2012 06:29:28 GMT

Elcid89 wrote:
Well, I've said my obligatory fatherly message :smileyhappy:

If it were me, I would have walked away from the deal while I still had my recoupment of earnest money intact from the denial.

You need to tell your lender than you want to see estimated closing costs. The real numbers at closing will go up or down from there depending on which day of the month you close, but it will give you a "you need to be prepared to write a check for this amount at closing" ballpark to plan for.

Your friend's loan, unless I am mistaken, was seller paid closing. He would never have seen these fees or had to pay them, because the seller paid them for him. Any lender is going to make you prepay homeowners / hazard and estimated property taxes into escrow at closing.

Get those numbers from your lender. NF should have given you one the first time that you sat down with them. Never, ever do a mortgage over the phone. Bad bad bad bad idea IMO. It leads nowhere happy and will make you want to shoot people.

HAHA! Took the words out of my mouth!! So true. I wanted to throw our ever-expanding paperwork file at him at the very least! My fiance sat down with them originally, and he was actually given a preapproval letter! They didn't give him much of anything after that, and our loan officer was pretty sketchy. I'm convinced that his lack of motivation was a big part of our denial. I had LOTS of good documentaion and paperwork that probably would have at least made them take a little longer in their decision.

We got lucky and got an extension on the due diligence date for Oct 13th. So as long as we have acceptance or denial by then, we can still get our earnest money back. The seller seems to be pretty motivated to get rid of the home though, it's kindof a wonky situation for them from what I understand. There was a whole mess with timber rights. They had been sold, but we wanted them to be included with the property because a good at least 9.5 acres of the property are heavily wooded. So the seller has obtained them and will transfer them back to us at closing.

Yes, my friend's loan was seller paid closing. This one is as well, up to 1500. I will definitely ask for the good faith estimate though. I'm going to call up the new LO first thing in the AM and make an appointment to sit down with him and bring all our paperwork. I could probably start to rival some phone books with the size of the file I now have!

Whatever happens, I'm just ready to stop bunking with my parents. My mom is driving me absolutely bonkers with her obsession with the election campaign coverage. CNN or Fox news is on blast 24-7. It's enough to keep you awake at night. (as I type this it's 2:27AM!) :smileysad:

Re: What a mess! Do you think we'd qualify?

Panda2108 — Sat, 13 Oct 2012 19:57:59 GMT

I'm not afraid to admit when I'm wrong. And Elcid, you were right.

The second lender wasn't able to get us approved because we don't have enough in assets and apparently I don't have enough revolving credit. The fact that my FH and I are not yet married also played a factor, and while all but one of our 3 loans is due to be paid off in the next 6 months, it was still somehow being factored into the DTI in the automatic approval system.

FH has a 740 mid score. Mine is a 648 now.

This is what the LO suggested we do:

1) After getting married: FH add me as an authorized user to the two credit cards he has that are currently at zero balance, charge 15-20 dollars on it, let it hit the statement and then pay it off.

2) Pay down the big loan, and pay the two smaller ones off or almost off.

3) Drop as much money as possible in savings.

4) Call him back in 90 days and try again.

I called our realtor to cancel the contract and cried when we hung up. FH and I worked so hard on getting everything ready to get this house. Our realtor called the seller's agent and something was mentioned about the possibility of renting this house until we can buy it. I told her that we'd ABSOLUTELY be interested in that, because it would prevent someone else from snapping it up and get me out of bunking with my parents. She's still waiting to hear from the seller's agent to try to solidify that plan.

Anyone else have any other advice that might help me get qualified?

Re: What a mess! Do you think we'd qualify? UPDATED 10/13

webhopper — Sat, 13 Oct 2012 20:55:04 GMT

You might be able to lease the property and buy an "option" where they couldn't sell to anyone else for 1 yr. This would give you and your man time to get things straight. Good luck and tell him thanks for his service!
my husband is also a marine; served from 2001-2006. He is pursuing his chapter 31 benefits for education now and will go to school starting in spring.
The stipend for post 911 GI bill is very nice. You may want to encourage your guy to look at his education benefit options while y'all are still young.

Re: What a mess! Do you think we'd qualify? UPDATED 10/13

Panda2108 — Sat, 13 Oct 2012 21:56:15 GMT

That sounds pretty interesting about buying an option. I'll ask our realtor to look into it. We expect to have the ball rolling around the 3 month mark anyway as I'll be working about 30 hours of OT every week for the next 6 weeks at least and we are getting married this month. That'll give us another 1100 in BAH plus 300something in BAS which can go straight to savings along with all my OT money. By mid-december we should be sitting pretty as far as assets.

And it's so funny that you mention the GI bill! I only just convinced him a couple months ago to give school a shot. I'm in school as a bio major and getting ready to change my major to nursing at ECU. This home is about a 25 minute commute from campus, but outside all the craziness of the city so it's perfect for both of us to work on our education. The payment on it would cost less than most apartments in decent neighborhoods and we're pretty enamored with the location.

Thanks to your hubby for his service as well and congrats to him for pursuing his education! Loving a service member can sure be tough at times, but so worth it.

Re: What a mess! Do you think we'd qualify? UPDATED 10/13

webhopper — Sun, 14 Oct 2012 04:18:06 GMT

Well loving a marine is definately different than anyone else. You grow a tolerance for guns of all types. Learn more about war history than you ever wanted to know and you get to hear that good old expression about how pain is just weakness leaving the body. You learn to open your doors wide to any and all of his marine brothers and to always give to any charity that supports our troops. But... my husband cleans; cooks; works; and takes care of me. I'm the main breadwinner in our family and its nice to come home and just have everything taken care of. Marines never know how to quit. They just keep going. My husband was my rock when I was going through my house buying ordeal. We literally ended up homeless for about 3 months and he never complained. We weren't even married yet and he still stuck it out. That's how I knew he was the one. He didn't care about how much money I had and he certainly isn't materialistic. Our new home has an outdoor building with ac and heat and a seperate septic and plumbing. he has turned it into his ammo room where he reloads bullets. Our partnership is strong and I'm glad to have him :)

topic Re: What a mess! Do you think we'd qualify? in Mortgage Loans

What a mess! Do you think we'd qualify? *UPDATED 10/13*

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Re: What a mess! Do you think we'd qualify? *UPDATED 10/13*

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Re: What a mess! Do you think we'd qualify? *UPDATED 10/13*

What a mess! Do you think we'd qualify? UPDATED 10/13

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Re: What a mess! Do you think we'd qualify? UPDATED 10/13