1st time home buyer really confused

[Anonymous]

This is our first time trying to buy a home and we're a little scared that what our mortgage broker is saying is all a dream. She claims we'll be approved with no problem but after reading some posts on this forum I just don't see it happening. I think our DTI will be too high and his overtime won't be counted but she swears it will be. Here's a little background info ....

Doing loan in husbands name only.

Been on current job for 14 months but same line of work for years. His current pay is $24.21 hr but he has overtime every week. He made $68,000.for 2008 that's with his overtime. Last year 2007 he only made $27,000 after expenses on his own truck. 2006 he made $55,000.

Mid credit score is 638

Location is South Louisiana

USDA Guaranteed loan

Home price $188,000 (total financed $191,760. w/ seller to pay 6500. towards closing) purchase agreement on 12/12 with $1000. deposit (we paid)

Interest Rate locked @ 5.5% (exp on 1/14/09) no written proof given when asked

Appraisal done and report recieved on 12/19 (we paid)

Home Inspection done on 12/16 (wepaid)

File went to underwriter on 12/17 (broker says it will take 5-7 bus days to get it back)

Home Owners Ins $2600yr cheapest I could find all other were$3200 - $4900)

Taxes $1300yr

Closing set for 1/14/09

Debts                                                 Monthly        

Installment loan pd down to 6 months    $192            Bal  $1152. (broker says this debt won't count against us)

Car Note                                             $369.           

Lease                                                 $  65.           

Credit Card monthly payments              $591.            

*We will be paying off $300 of the monthly credit card debt at the end of January, wish it could be sooner but not possible.

Broker says we won't need any money at closing.

I just don't see this all happening and worried we might be getting excited and in for a big let down. I would appreciate any comments good or bad. Thanks!

Message Edited by GClark on 12-27-2008 01:31 PM

[Anonymous]

Hi GClark,

Your mortgage broker is right.

Based on what you've posted, you won't need to bring

any money to closing.

We're in the market as well and we're seriously considering

a USDA loan. There are lots of great things about this loan:

--- 100% financing

--- 30 year fixed rate (5.5% is right in the middle of the range) 

--- low qualifying FICO score of 620

--- closing costs can be rolled into the loan

--- overtime pay can be included in annual salary

--- any installment loans to be paid off in 9 months or less

are not included in the debt to income ratio 

It sounds like you're right on track, GClark.

If you're just nervous that things won't work out, that's normal.

All homeowners go thru that, so you're not alone.

You can always bring your checkbook if it makes you feel better,

but if the mortgage professional putting the deal together says that

you don't need any money, I'd go with that. 

We'll keep our fingers crossed for you. Good Luck!!!

CanDo

"The right attitude is everything" 

[BrianB_The_Loan_Professor]

What you are saying makes sense - That overtime needs to be 2 years

Have you heard back from UW yet?

Let us know how it turns out

USDA is a great loan - probably the best product available today without 20% down

Brian

[Anonymous]

 Brian that's what I thought, everything I've read says you need a 2 year history at the job for the overtime to count. The broker showed me some paper she had in our file for Chase and one thing listed said overtime with one year. I have no idea what that paper was though, kicking myself now for not looking at it closer. I'm praying it's true and TRYING not to get excited yet. I don't think we can qualify for that much just on his base income of $50,300. with our monthly debt, what do you think?

We haven't heard anything back from the underwriter yet, couldn't even tell ya who she sent it to. She did say it will only take 5-7 bus days to hear something so I'm thinking by Wed. The broker does send status updates pretty regulary though.the title company contacted us on 12/18 and said they were pulling everything, is this a good sign?

One thing that sucks is my real estate agent went on a vacation to London until 1/7 and didn't say a word about it until the day before he was leaving!

Thanks for the encouragement cando!

[Anonymous]

You're welcome, GClark. I'm sure things will work out for you.

I will defer to Brian's expertise as a mortgage professional.

But as a fellow consumer like yourself, the fact that your husband

only has 14 months on record for overtime is because he's only

been working in his current position for 14 months. But the compensating

factor is that he's been in the same field for several years...which tells

me he's very stable and a very good credit risk. The feeling I'm getting

is that your mortgage broker sees this the same way, which is why she

keeps telling you that everything will turn out OK.

And I hope you hear from the underwriters soon. You must be a nervous

wreck, but once the decision comes back from them you should be fine.

Just hang in there, GClark. You're much closer to the end than you are

to the beginning. We'll be pulling for you!!!!!

CanDo

"The right attitude is everything" 

[Anonymous]

Nervous wreck??? I have no fingernails left, I stay awake all night thinking of everything that can go wrong, I search the web all day long looking for anything and everything I can find .... I think I'm past the nervous wreck stage lol

Thank you sooo much for your kind words you don't know how much that means to me!!!

[ShanetheMortgageMan]

It sounds like Chase has already approved your loan in underwriting and all that needs to happen is USDA reviews and gives their commitment.  Chase's underwriter would have already addressed the OT issue (if it is an issue) in their initial approval to you, and they are conservative on their approvals.  For the record I've never had a lender approve a USDA loan and then USDA denies their guarantee/commitment, so chances are that you will be just fine.  Chase (as are all lenders) is slow now so don't worry if you don't get an answer exactly when they say you will, they are just real busy with the low rates & end of the year/"skeleton" crews.

[Anonymous]

Shane, I'm not sure if we even had an approval LOL Never recieved anything in writing about an approval. The paper I seen (very quickly) had CHASE across the top and she pointed out one line that said 1 year overtime, then quickly closed the folder. I didn't think anything of it until recently. I did speak to the processor today and she said she will be sending an email to the underwriter today and will have an answer on when the file should be finished. She just kept saying we're going to be ok don't worry. BUT I CAN'T HELP IT  

I sure hope your right about them just being busy and with a skeleton crew from the holidays.  If I could just my mind to stop thinking all these crazy things that can go wrong lol

[Anonymous]

Shane's comments are very encouraging.

I'm sure things will work out pretty much like he said.

Since there are 2 parts to the approval equation, your

mortgage broker is no doubt waiting until both Chase and

the USDA sign off on the loan before contacting you.

I know you can't help worrying, but it shouldn't be much longer

before you hear something.

And please let us know how things turn out, GClark.

Just don't scream too loudly when you're approved cuz

we don't wanna go deaf before the New Year even starts....LOL

Hang in there just a little longer!!!!

CanDo

"The right attitude is everything" 

[ShanetheMortgageMan]

Ask the processor/loan officer to fax you over the "Chase Rural Housing File Status Report" on your loan... it's what Chase calls their loan approval forms.  In the upper left it'll say "Underwriting Status: Approved with Conditions" if you have an actual loan approval, then below that it'll list your name, loan type (USDA GRH 30-year fixed), your loan number, etc. and then at the bottom it'll list all conditions that need to be satisfied before your loan docs can be drawn up.  If there are any questions pertaining to the OT, they'd be listed as one of those conditions.