Denied Conventional Loan

[neptunejcw]

Yesterday my loan officer called me & told me the system wouldn't except my conventional loan & neither him or the underwriter can understand why...I'll give you a lil info...New construction sale price is 262,000...I have 10% to put down, mid score is 683, great ratio I think it's like 28% C.Card balance are 1000 limit with a balance of $20 & another card with a 300 C.L with a $50 balance...I have a car loan which I've had for a year $504 a month balance is like 28K & my income is around 92K a year... Only baddies I have is a old car loan from 2010 with a few lates but it's paid off & a paid off judgement from 2010...& my other scores are T.U. 670 &Ex 695 & Eq.683...Can someone please explain how on earth can the system give me a" refer with caution " flag on my file. Even everyone in the office is lost as to why it won't approve me. But of course the system approved me for a FHA now they pushing me to go FHA

[sports1965]

and based on your scores going FHA  is probably the better option for u anyway

[Anonymous]

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@neptunejcw wrote:
Yesterday my loan officer called me & told me the system wouldn't except my conventional loan & neither him or the underwriter can understand why...I'll give you a lil info...New construction sale price is 262,000...I have 10% to put down, mid score is 683, great ratio I think it's like 28% C.Card balance are 1000 limit with a balance of $20 & another card with a 300 C.L with a $50 balance...I have a car loan which I've had for a year $504 a month balance is like 28K & my income is around 92K a year... Only baddies I have is a old car loan from 2010 with a few lates but it's paid off & a paid off judgement from 2010...& my other scores are T.U. 670 &Ex 695 & Eq.683...Can someone please explain how on earth can the system give me a" refer with caution " flag on my file. Even everyone in the office is lost as to why it won't approve me. But of course the system approved me for a FHA now they pushing me to go FHA

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You need at least 740 or higher score for a conventional loan.  With your scores your PMI rate would have been too high.   

[Anonymous]

The conv rate is about .5 higher than FHA

FHA mi factor is .80

conv mi factor with 680 score is .57

when you include the FHA upfront mortgage insurance, the FHA payment is a tad higher, and you have a higher loan amount by 1.75%

conventional is the cheaper option initially and you are also not married to FHA's MI for 11 years.

there is so much misguidance in these forums.

Ed Groussman

[neptunejcw]

With 10% down my MI would've been .57... & when my loan officer called me on the phone he did say the FHA loan monthly payment was about $30 than the conventional loan & on the FHA loan my MI is 157 compared to 110 I think on the conventional loan. & you don't need a 740 for conventional loan

[neptunejcw]

$30 cheaper typo

[Anonymous]

i sent you a message

[Anonymous]

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@neptunejcw wrote:
With 10% down my MI would've been .57... & when my loan officer called me on the phone he did say the FHA loan monthly payment was about $30 than the conventional loan & on the FHA loan my MI is 157 compared to 110 I think on the conventional loan. & you don't need a 740 for conventional loan

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I should have said you need a 740 or higher to get more favoral rate and low PMI with conventional loan.  

[ezdriver]

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@neptunejcw wrote:
Yesterday my loan officer called me & told me the system wouldn't except my conventional loan & neither him or the underwriter can understand why...I'll give you a lil info...New construction sale price is 262,000...I have 10% to put down, mid score is 683, great ratio I think it's like 28% C.Card balance are 1000 limit with a balance of $20 & another card with a 300 C.L with a $50 balance...I have a car loan which I've had for a year $504 a month balance is like 28K & my income is around 92K a year... Only baddies I have is a old car loan from 2010 with a few lates but it's paid off & a paid off judgement from 2010...& my other scores are T.U. 670 &Ex 695 & Eq.683...Can someone please explain how on earth can the system give me a" refer with caution " flag on my file. Even everyone in the office is lost as to why it won't approve me. But of course the system approved me for a FHA now they pushing me to go FHA

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The thread title is about having been denied for a convention loan yet your post is about an FHA loan app?

Sounds to me like you have a knucklehead lender. Find yourself another lender.

[Anonymous]

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@ezdriver wrote:

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@neptunejcw wrote:
Yesterday my loan officer called me & told me the system wouldn't except my conventional loan & neither him or the underwriter can understand why...I'll give you a lil info...New construction sale price is 262,000...I have 10% to put down, mid score is 683, great ratio I think it's like 28% C.Card balance are 1000 limit with a balance of $20 & another card with a 300 C.L with a $50 balance...I have a car loan which I've had for a year $504 a month balance is like 28K & my income is around 92K a year... Only baddies I have is a old car loan from 2010 with a few lates but it's paid off & a paid off judgement from 2010...& my other scores are T.U. 670 &Ex 695 & Eq.683...Can someone please explain how on earth can the system give me a" refer with caution " flag on my file. Even everyone in the office is lost as to why it won't approve me. But of course the system approved me for a FHA now they pushing me to go FHA

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The thread title is about having been denied for a convention loan yet your post is about an FHA loan app?

Sounds to me like you have a knucklehead lender. Find yourself another lender.

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" Even everyone in the office is lost as to why it won't approve me."

^^ This rubs me the wrong way. AUS will always give the reasons for its decision. And if your lender cannot help you problem solve at this point, I'd find a new one.

Regarding conventional vs. FHA, you should always run the numbers (for those giving advice too). Here are the numbers for P&I only (assumed rates):

@Anonymous - $239,927 loan @ 4% w/ .80 MI - $1146

@Conventional - $235,800 @ 4.5% w/ .57 PMI - $1195