Down Payment - Can anyone explain this?

[nnmom]

 I am in process of buying a house - have a contract to sell my current home and contract accepted on a new one. My mid-score is 665 with nothing negative in the last 4 years, net income of 165k, only debt is current mortgage, car payment, and student loan. The house I am buying is 322k. My DTI is well below what is required and I have enough cash to put 20% down. When shopping lenders, one of them told me I cannot get an 80/20 conventional loan and would have to put 30% down. It doesn't really matter because I've already gotten conditional underwriter approval through another lender, but I'd really like to figure out why I would be refused a 20% down mortgage. I asked the loan officer and said I'd already been approved for that amount through other lenders. His very short, rude response was, "I don't know what your other lenders do."

[Anonymous]

Only thing I would guess is that your score is a little low for their underwriting standards. Most lenders want to see at least 680 for a conventional loan.

[StartingOver10]

If you used the phrase 80/20 to the LO, then s/he was thinking you were asking for a loan for 100% of the purchase price (most likely). That particular way of phrasing the LTV is for two loans; the first mortgage at 80% and the second at 20%. The structure is to avoid PMI.

When you are only looking for an 80% LTV then you ask for a conventional loan with 20% down payment. I bet if you clarified with the LO you would have a different answer. That is one of the problems with working with inexperienced LOs.

[nnmom]

No, I didn't use that phrase. He knew exactly what I was looking for. He came back and said they only have a fixed conventional loan with 30% down. I would have to go ARM if I wanted 20% with an 80% LTV. When I questioned him, he said I'm not qualified. Here is what he said last... "We do but you don’t appear to qualify because of the LLPAs. You will not pass points and fees at 80%."  

What is he talking about? I have the cash to pay any points or fees they come up with. I asked the lender we have now gone with and they have no idea what he was talking about either. 

[DallasLoanGuy]

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@Anonymous wrote:

Only thing I would guess is that your score is a little low for their underwriting standards. Most lenders want to see at least 680 for a conventional loan.

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plenty of lenders have 95% financing at 620 score.

[StartingOver10]

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@nnmom wrote:

No, I didn't use that phrase. He knew exactly what I was looking for. He came back and said they only have a fixed conventional loan with 30% down. I would have to go ARM if I wanted 20% with an 80% LTV. When I questioned him, he said I'm not qualified. Here is what he said last... "We do but you don’t appear to qualify because of the LLPAs. You will not pass points and fees at 80%."  

What is he talking about? I have the cash to pay any points or fees they come up with. I asked the lender we have now gone with and they have no idea what he was talking about either. 

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That does sound strange.

We know that all lenders have their own guidelines - maybe this one has had their ability to loan severely curtailed for some reason. Who knows?  I am glad you went to another lender that does that the capacity to lend with normal criteria. 

[DallasLoanGuy]

maybe they were offering a subprime loan

[Anonymous]

Was the lender "Darrell, Darrell, and my other brother Darrell's" Mortgage Brokers LLC?

[ezdriver]

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@nnmom wrote:

 I am in process of buying a house - have a contract to sell my current home and contract accepted on a new one. My mid-score is 665 with nothing negative in the last 4 years, net income of 165k, only debt is current mortgage, car payment, and student loan. The house I am buying is 322k. My DTI is well below what is required and I have enough cash to put 20% down. When shopping lenders, one of them told me I cannot get an 80/20 conventional loan and would have to put 30% down. It doesn't really matter because I've already gotten conditional underwriter approval through another lender, but I'd really like to figure out why I would be refused a 20% down mortgage. I asked the loan officer and said I'd already been approved for that amount through other lenders. His very short, rude response was, "I don't know what your other lenders do."

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I don't see why you would consider that a rude response. It was honest and accurate. You cannot expect a rep for one lender to explain why another lender would come to a different conclusion. We don't know how your entire credit profile looks but there could be many reasons why one lender would turn your down while another would not.

[Aprile421]

I just closed on my house the other day. When I was shopping for mortgages most of the companies wanted a 680 mid score before they would even consider a conventional loan.