First Time Homebuyers.. Wells Fargo FHA. Any Chance???

[Kizzie]

So our story goes like this. Fiancé was per approved for 160k in January. We found a home for $161,000 and got the seller to assist with $4,830 towards closing. Since emu fiancé was the one approved through his broker we decided that he would apply on his own. Well the nightmare began there. The LO was extremely incompetent. We were told we would close on his loan last Friday. Well we got a call that loan was denied last Thursday. Middle score was 620, 65k salary. Per the LO, He was denied because he had a 30 day late on his student loans from 2012.

So now we are trying to see if I can be approved through Wells Fargo for our first home but we are extremely nervous. We already received a pre qualification letter from our new LO. We would like some input on our chances.

Stats

Home- $161,000
Down payment- 6k and $4830 from seller.
Salary- 72k - 3years on the job- 7 in the industry.
Scores- eq673 ex690 trans 636
Installments- 19k student loans. Late 2008&2010 60 days.
Installments- 14k car loan. No lates
Revolving- cap1 card limit 300. Balance 82. Late 30 11-2011
Revolving-cap1 card limit 2000. Balance 1472. No late.
Collection- $786 paid 2008
Collection- $532 dispute 03-2012. We have fund to pay this.
Assets- 6k in the bank. (Gift from fiancé)


Any thoughts on our chances? We would appreciate any advice.

[lks638]

Depending on the LO and the lender, I'd say you have a decent chance, my experience with Wells Fargo however, was not so great, you might try Prospect Mortgage or a broker.  Underwriters like to see downpayment funds saved up over time. Default rates are much higher when the buyer lacks emotionaly attachment to the funds, such as when they are a gift. 

Your lowest hanging fruit in terms of getting your scores up even further, is to lower your utilization ratio as much as you can. Less than 20% is a good target. Try and get those collections removed entirely.   Try writing goodwill letters to your student loan companies and the collection company you paid off.   Also try offering to pay for delete on the other collection.  Make sure you indicate that they are not a dispute, because if you have open disputes, you'll automatically be declined for an FHA backed loan.  

[Kizzie]

The gift was actually 3k... I already had $2600 in my acct already. In the last 2 months I've had 6+K in my checking account. The application is being sent to the processor. Should i call the collections agency and attempt to clear it off? Do you think its too late?

[DallasLoanGuy]

if the lender recorded the denial with hud, another lender might have a hard time doing this.

to prevent 'lender shopping' hud says that one fha underwriter cannot overrule another fha underwriter.

if there was a material change to the file, then they CAN overrule.

you need to ask your lender if you can withdraw the loan or if they can just suspend the file and not record the denial.

[Kizzie]

Sorry for confusion. My fiancé got denied. Now we are going through Wells Fargo with my credit instead of his. He got denied but my credit has not been used.

[DallasLoanGuy]

you look ok to me

[Kizzie]

Update

Conditionally Approved by underwriter. Conditions were minor. LOE for gift from my fiancé and Tax return deposit proof. Appraisal and Title were ordered Yesterday. Processor thinks we should hear back by Friday (Rushed).

Only issued is Seller (Fannie Mae) has not replaced the name on the executed contract yet. We have been waiting for 2 weeks now. Close date is April 26th. Can't close the loan without and excited contract with only my name on it.

Hopefully we'll hear back from FNMA in the morning. We're just thankful to hear that the loan was conditionally approved. :-)