Hi. I am in the middle of the mortgage process, and I had a few questions, and honestly would just like a little assurance because I am freaking out, lol. My husband and I were not planning on obtaining a mortgage right now, but we contacted a lender just to see where we were in the middle of August. To our surprise we were pre-approved by two different lending companies. After contacting who is now our realtor, we went and looked at some houses. I found a house (I say I, not my realtor!) that is actually only 4 houses down from where we currently rent. It has just been completely remodeled as part of the Neighborhood Stabilization Program.
Basically, the government gave all this money to the states and counties that were hardest hit during the mortgage crisis. The counties buy up forclosed and abandoned homes, remodel them, and sell them to income eligible homebuyers. They also pay all closing costs and 50% of the downpayment. NSP has the option to include prepaids as part of the buyer's downpayment contribution. For example, the house we found is selling for $108,000. 50% of our downpayment is $1890. We have paid, out of pocket, $1695.00. Since we are only required to pay half the downpayment, we should only have to show up to closing with $195.00, give or take depending on the final HUD-1 statement.
Anyway, the income limitations are stringent, it is hard to qualify, and there is a lot of paperwork and verification to go through. It took about 3 weeks just to get approved for the program, much less a loan. While we were waiting on this, we chose a local mortgage banker who deals with the NSP program. He gave us a conditional approval instead of a pre-approval, with the conditions being the usual: appraisal, title, NSP approval, and CTC from underwriting. So, here it is nearly 2 months after signing the purchase contract, and my file just went into underwriting this past Friday (processor re-pulled credit, asked for all LOE's, updated paycheck stubs, bank statements, 401k, etc.). Fast forward to today, the loan processor is at jury duty, nothing from the underwriter, and I have no been able to reach my LO for 2 weeks. The NSP contact is ready to give an award letter as soon as the HUD-1 is issued. Oh, I forgot to mention that our original close date was 9/29/2014, extended to 10/15/2014, and just extended again to 10/24/2014.
This is an FHA loan with a mortgage banker with in-house DE underwriters. My husbands mid score is 632 (it was over 640, but we did not opt out and an old collection came and bit us in the butt). There are no judgements, BK, foreclosures, or public records of any kind, just that one closed collection account that popped up from 2009. We have compensating factors such as a very low DTI (32 back end), my husband has been in his current job for 10 years, in the industry for 23 with steady raises every year, we have been renting the same house since 2008 with no late payments (processor took lease and 12 month payment history), and our housing payments will be less than our current rent, plus the house is Energy Efficient. Based on this information, even with the low mid-score, how do you guys think underwriting will respond?
