So, I am currently stressing as I have put in an application for a mortgage loan to get a pre-approval. The lender that I chose to go through has tried to put me through the automated system once before in February and she stated she was unable to get an approval. My scores at that time were 541/627/650. At that time she suggested that I talk to a credit guy that they work with and see if I could get my scores up a little bit more. At this time, I was only eligible for the Freddie Mac program because they were the only program that accepted the IBR payments.
Fast forward to today…I applied on 5/2/2017 as I was able to increase my mortgage scores to 600/680/703. The lender, who has no overlays, collected all information (W-2’s, bank statements, explanations, paystubs, etc…) as she did previously and stated she would put the numbers in to the Automated Underwriting system and let me know. She came back the next day and stated that she was still unable to receive an approval and had to have it manually underwritten because I do meet all criteria but for some reason it doesn’t like my file for automated approval.
My question is: Since I could not get an approval from the AU system and it is now being manually underwritten, what are my chances of being approved. She stated that it could take 72 hours or more before I know anything, which would be Monday and I am biting nails and grinding teeth with worry. She stated that she won’t know anything until she gets my file back but that she hasn’t had a manually underwritten loan not go through before so she is very optimistic. Me on the other hand, I am a nervous wreck.
Can someone tell me if they think my chances of being approved are good? Just need some insight on what to expect.
1. Mortgage Credit Scores:
Me: 600/680/703
Credit Negatives:
Me: I have 3 collections, all medical and all paid on my credit files. Highest is $125
Revolving negatives:
Last late was 1/2015 for a vehicle loan that is now paid off and closed.
Revolving positives:
A. I have 5 CC accounts oldest opened in 2014, latest opened in 4/2016, no lates on any. And Utilization is at 0% on all.
Total credit available is only about $4500 across all 5.
Recently consolidated all of my student loans (3/2015) so they all appear on one loan and is current with a reported payment of $22.77 (IBR) plan. Oldest student loans (about 10) reports as of 1999 and is paid, closed and never late
I do have a Master’s Degree and my student loan balance is high at $150,000 due to be forgiven in 10 years (8 remaining).
Car loan opened in 2/2017 – payment $452 traded in previous car that is now paid due to lower interest and payment. Balance $20,000
3. Gross Income.
Me: $60k
4. Source of income.
Me: W-2 salary employment
5. Monthly debt payments.
Car loan: $452
Student loans:
Pmt $23, balance $150k – Master’s Degree
6. Employment
Same job/industry for 7 years
7. Assets/Reserves. This is to determine how much you could potentially have as a down payment and also as reserves to help qualify (for example if your debt to income ratio is high this could help qualify you anyway).
Savings, $8k
Checking, $ 1k
401k: 5k
9. Property Description:
Single Family, 2003, great/excellent condition.
- Property Value.
Currently renting the property I am wanting to purchase. Owner has started negotiations at $217,000. Current value according to Zillow, redfin, etc… $230,000 - $242,000. I want to buy for no more than $200,000 and comparables sold in last 6 months average at $190,000
Owner is looking for me to negotiate and is more than will to work with me on price. I have been renting from them since 2010 (7 years).
I have to do a conventional loan with Freddie Mac or Fannie Mae as I have student loan debt and need them to use my IBR payment and not the 1% as most programs do. I have enough to put down 3.5% which the lender said is fine.
- Occupancy.
Primary residence
12. Transaction Type. Purchase
