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First off, a little back story. I've been working on my credit in order to apply for an FHA loan. My middle score is currently 600 and the only blemishes I have are (4) late payments I garnered in late 2014/ early 2015. DTI is 16%.
I've been looking at buying a house from a builder and have been working with a lender on getting my ducks in a row for a FHA loan. The lender ran my credit for pre-approval today and said "he sees no reason why it would be denied". I get an email from him this afternoon containing the following:
"fha has changed some guidelines recently. if you want we will have to submit the entire file with a good letter of explanation on why there were the late payments and see what the underwriter says. let me know what you want to do."
To which I replied:
"Okay. So when you say turn in the entire file, what are you referring to? I seen you mentioned underwriter, isn't that part of the final approval process or is this just for the pre-approval?"
The lender responded with:
" FULL FILE IS THE CONTRACT, ALL DISCLOSURES SIGNED, ALL INCOME DOCS, ASSET DOCS, LETTER OF EXPLANATION ETC GOING TO THE UW TO BE REVIEWED"
I sent another email back asking if I needed to go ahead and contact the seller for price negotiations, contracts etc. but I assume with it being after 5:00pm here, I won't get a response till tomorrow.
So basically, I'm at a loss. I have no idea where I am in the process and it just seems odd to go from pre-approval to signing contracts etc without even getting a approval amount.
Very poor communication on the lender's part. I'm assuming you are not yet in contract, correct? It sounds as if he wants to send off your file to underwriting for a "mock approval" before you actually go into contract just to make sure you will get an approval when your offer does gets accepted.
I am not in contract.
I wanted to get a pre-approval amount before I dealt with the builder. In the email the lender specifically states in the one of the emails "contracts".
Can he turn in a unsigned contract?