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Automated Approvals & Manually Underwritten Loans....... What is the difference?

Js5
New Member

Re: Automated Approvals & Manually Underwritten Loans....... What is the difference?

Can you tell me whether unreimbursed business write off will affect my home buying chances
Super Contributor

Re: Automated Approvals & Manually Underwritten Loans....... What is the difference?

you should start a new thread for that.

but yes.

can you tell us more?

 

Retired Lender
Highlighted
Super Contributor

Re: Automated Approvals & Manually Underwritten Loans....... What is the difference?

you should start a new thread for that.

but yes.

can you tell us more details in the new thread?

 

Retired Lender
Established Member

Re: Automated Approvals & Manually Underwritten Loans....... What is the difference?

Hello, not sure if this is the right spot, but need a conventional loan expert about DU/LP approvals.  

 

According to MyFico's mortgage model, I have a mid 703 fico score.  I have a couple of issues though.  First, my credit utlization was 37% (4500 on 12000), I have now paid them off but they will not report until June 6th.  Second, I had a bankruptcy in Dec of 2013, discharged in April 2014 due to cancer and mortgage loan crisis.  There was a forclosure, but it is showing up on only one credit bureau and it is inaccurate.  I am trying to get it disputed and resolved.  Regardless, even with the foreclosure issue in dispute, with the credit cards paid off, my score should go up 10-20 points which I know can make a difference.  

 

Problem I have is that I am starting a new job 800 miles away in 2 weeks, and school starts for the kids Aug 1.  So I don't have much time to buy a home.  If I let the lender pull my credit now and he also does a DU/LP approval and it does not come back satisfactory, what are my options?  If everything is fixed in the next two weeks on the credit report, can a new DU/LP approval be run?  What happens if I go to another lender who does a DU/LP approval in a few weeks, would they use the old approval or would they get a new one based on the new credit report?

 

Thank you for your time and help.  

 

P.S. I can't go FHA because of student loan debt.

Established Contributor

Re: Automated Approvals & Manually Underwritten Loans....... What is the difference?

The foreclosure is going to kill you.  I think but can't recall with FHA its atleat 2 years and possibly longer. Conv I know it not shorter.  Even if your over the their foreclosure minimum they still will see it.  Work on removal  and if that does not work better have some explaining to do. 

Frequent Contributor

Re: Automated Approvals & Manually Underwritten Loans....... What is the difference?

If you paid your credit card debt to zero, then you will not gain any points. You actually stand to lose up to 20 points. If you have more than one credit card, the best thing to do is pay all of them to $0 except one. The one that you don't pay to $0, leave a balance on there that is 1-9% of the credit limit on that card. 

 

Why can you not do FHA because of student loans? There are tons of people that do FHA with student debt. 

FICO8 Scores - 625TU / 640EQ / 649EX
On Mortgage Journey
Starting Mortgage Scores (Feb 17) 523EQ / 547TU / 564EX
Mortgage Scores Aug 17 624EQ / 649TU / 650 EX
Established Member

Re: Automated Approvals & Manually Underwritten Loans....... What is the difference?

Thank you for the response, FHA requires 1% of the loan balance which will kill my DTI.  

Established Member

Re: Automated Approvals & Manually Underwritten Loans....... What is the difference?

Just curious, does it make that much of a difference because of the declarations section on the 1003?

Established Contributor

Re: Automated Approvals & Manually Underwritten Loans....... What is the difference?


Hopefulbutlost wrote:

Hello, not sure if this is the right spot, but need a conventional loan expert about DU/LP approvals.  

 

According to MyFico's mortgage model, I have a mid 703 fico score.  I have a couple of issues though.  First, my credit utlization was 37% (4500 on 12000), I have now paid them off but they will not report until June 6th.  Second, I had a bankruptcy in Dec of 2013, discharged in April 2014 due to cancer and mortgage loan crisis.  There was a forclosure, but it is showing up on only one credit bureau and it is inaccurate.  I am trying to get it disputed and resolved.  Regardless, even with the foreclosure issue in dispute, with the credit cards paid off, my score should go up 10-20 points which I know can make a difference.  

 

Problem I have is that I am starting a new job 800 miles away in 2 weeks, and school starts for the kids Aug 1.  So I don't have much time to buy a home.  If I let the lender pull my credit now and he also does a DU/LP approval and it does not come back satisfactory, what are my options?  If everything is fixed in the next two weeks on the credit report, can a new DU/LP approval be run?  What happens if I go to another lender who does a DU/LP approval in a few weeks, would they use the old approval or would they get a new one based on the new credit report?

 

Thank you for your time and help.  

 

P.S. I can't go FHA because of student loan debt.


Hi Hopefulbutlost,

 

Ok so you have a couple of concerns here.

1) Fannie Mae requires 4 years after a bk discharge so you're asking for an exception based on extenuating circumstances.

2) This will cause problems for DU/LP because you're technically not eligible. This means your loan will to be manually underwritten.

 

As far as your questions go:

If your credit scores increase, we can pull a new credit report & re-run DU/LP using the new credit.

If you go to another lender, that lender will pull a new credit report & run their own DU/LP.

 

FHA allows a much higher debt to income ratio than Fannie Mae or Freddie Mac so how much is your student loan?

 

 

 

National Mortgage Banker.
VA Mortgage Expert.
Contributor

Re: Automated Approvals & Manually Underwritten Loans....... What is the difference?

So how do you go from thin credit to not thin? I have an installment loan that matures in a year. I also have two secured credit cards. What could I do to make this not thin?

Or when someone says seasoned tradelines.