Long story short, I received a preapproval for 400k with 5% down and a 658 midscore. We're now about a week from closing on a house which we put a contract on at 354k. My loan officer is now saying he can't get us approved at 5% but can get us approved by doing 80/10/10. He thinks if the score goes up to 660+ that he can get either a 95/5 or 80/15/5 to work. We can't do 10% so we're stuck waiting on the 2 point bump. I'm frustrated that we're now about 4k into this house and may lose it. What are the chances of us getting approved for 5% down at 660 when it wouldn't work at 658?
Have you looked at FHA financing? Only requires 3.5% down and you should be able to get approved with your scores. FHA can go as low as 580, but most lenders generally require at least 620. In any event, you're well above that.
Why can't he get you approved with the original pre-approval? Ask the LO what changed.
I agree - try FHA financing. You might need to do another inspection, unless the original inspector was FHA certified.
He says he has gotten files like ours approved in the past and thus expected it to be approved.
FHA won't work because our area limit is 271 I believe and the house we're under contract for is listed at 354.
so he assumed your file will be approved without having even submitting it to underwriting? Thats no good. First thing i did when i filled out our app was have the bank underwrite the loan for a full approval
I am sorry that this is happening...
I'd find out from your lender EXACTLY what he can push through right now, with your current credit score.
Will any family member or friend "gift" you the other 5%?
Can you cash out any investments, or scrape together loose change from merchadise returns, selling things you don't need?
If the lender can do a 80/10/10 - then you just need closing costs.
If the lender can do a 85/15 - then you just need closing costs.
Ask the lender - what CAN you do right now, with what we have?
You might want to try another lender. This one sounds like he did the classic error of not submitting your file timely AND not understanding the underwriting for your type of loan. Is this "loan officer" with the funding lender or a mortgage broker? If he is a mortgage broker, IME, then get away from him altogether. Lenders have different underwriting criteria - but if he is not the funding lender, then he is taking a WAG* as to what the criteria is at the time of submission.
*(WAG equals Wild Ass Guess)
sounds like the problem is the PMI<= lofty score requirements.
that is why he is looking at the 80/10/10 solution to avoid pmi