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Valued Contributor
Mike_B03
Posts: 1,141
Registered: ‎11-30-2012

Got Loan Approval Conditions...WHOA!

[ Edited ]

A list of 20 items! :smileysurprised:

 

Haven't actually heard from the loan processor yet, only saw on their online site that the conditions have been posted so I'll wait until they call before I start sending items.

 

There are a few that I'm scratching my head at and I'm not sure how I'll handle it, any advice?

 

1. Copy of earnest money check with corresponding bank statement and to document the clearing of earnest check. 

The earnest deposit was made with a cashier's check made out from cash at the advice of the builder's sales agent. I have a copy of the cashier's check but there are no bank statements to show or way to prove it was cashed (shouldn't they be able to verify if they deposited it?).

2. Bank statements for past two months. 

One one accounts, I withdrew all the money and have the cash. This was due to a judgment bank levy and didn't want to risk them taking the money. Do I just write a letter explaining that?

3. 2012 YTD P&L for period 01/01/13 - 04/30/13 and 2012 tax returns due after 4/15/2013

 

That's fine and all, but does that mean we won't get a loan commitment until May 2013? This is new construction due to be completed in June/July but that's an awfully long time to wait to know if we are approved or not. We haven't even told family or friends about the house purchase yet, was waiting to make sure we have the loan before getting all excited and sharing.

 

This is quite the long process. :smileyfrustrated:

Frequent Contributor
seigex
Posts: 425
Registered: ‎05-16-2012

Re: Got Loan Approval Conditions...WHOA!


Mike_B03 wrote:

A list of 20 items! :smileysurprised:

 

Haven't actually heard from the loan processor yet, only saw on their online site that the conditions have been posted so I'll wait until they call before I start sending items.

 

There are a few that I'm scratching my head at and I'm not sure how I'll handle it, any advice?

 

1. Copy of earnest money check with corresponding bank statement and to document the clearing of earnest check. 

The earnest deposit was made with a cashier's check made out from cash at the advice of the builder's sales agent. I have a copy of the cashier's check but there are no bank statements to show or way to prove it was cashed (shouldn't they be able to verify if they deposited it?).

2. Bank statements for past two months. 

One one accounts, I withdrew all the money and have the cash. This was due to a judgment bank levy and didn't want to risk them taking the money. Do I just write a letter explaining that?

3. 2012 YTD P&L for period 01/01/13 - 04/30/13 and 2012 tax returns due after 4/15/2013

 

That's fine and all, but does that mean we won't get a loan commitment until May 2013? This is new construction due to be completed in June/July but that's an awfully long time to wait to know if we are approved or not. We haven't even told family or friends about the house purchase yet, was waiting to make sure we have the loan before getting all excited and sharing.

 

This is quite the long process. :smileyfrustrated:


1) I'm sure this one will be taken care of by your LO that it was a cashiers check, so no proof of clearing the account will be needed.

 

2) You only have to show bank statements for accounts were you want to use assets and source funds from. For example, if you are funding your down payment from BANK A then they want to make sure you didn't take a loan out for that down payment. And if you're using BANK B as assets for the loan, they want to make sure your assets aren't from loan also. Basically, they are checking all non-paycheck deposits within the last 2 months to make sure you're not going into debt to pay for your mortgage. Also, if you get gift money, they will want to source where the gift money came from and will likely ask that person for bank statements as well to source the funds.

 

3) as far as if you have to wait until 5/13 to get the loan, you can get the commitment early, but since you are not going to close on the house until june/july, they will want to make sure all necessary documentation is in in advance. Those will be the last requirements needed to get the keys.

Lender Pull (11/3/12) FICO EX: 740 EQ: 680 TU: 702

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Valued Contributor
Mike_B03
Posts: 1,141
Registered: ‎11-30-2012

Re: Got Loan Approval Conditions...WHOA!

Thank for the reply, a couple questions...

 

1. Will they need to know where the cash came from that was used to get the cashier's check issued? It came out of the bank, but it was withdrawn a few weeks earlier and kept as cash in the house.

 

2. The bank accounts situation is stressing me out the most. We have a total of three bank accounts, 2 of them being personal accounts and 1 of them business. We use the business account for personal use as well so I listed that account as one of our asset accounts. There are large deposits in that account, some in the thousands, from clients who paid for different items. Will they need to see invoices that correspond to those deposits or how will that work? On the account that we took the cash out of, will they think it's odd that we took out the cash?

 

 

Frequent Contributor
seigex
Posts: 425
Registered: ‎05-16-2012

Re: Got Loan Approval Conditions...WHOA!


Mike_B03 wrote:

Thank for the reply, a couple questions...

 

1. Will they need to know where the cash came from that was used to get the cashier's check issued? It came out of the bank, but it was withdrawn a few weeks earlier and kept as cash in the house.

 

2. The bank accounts situation is stressing me out the most. We have a total of three bank accounts, 2 of them being personal accounts and 1 of them business. We use the business account for personal use as well so I listed that account as one of our asset accounts. There are large deposits in that account, some in the thousands, from clients who paid for different items. Will they need to see invoices that correspond to those deposits or how will that work? On the account that we took the cash out of, will they think it's odd that we took out the cash?

 

 


1) I would think, you just need to show where it was withdrawn from if they need that, but that's something your LO will be able to tell you...

 

2) I couldn't answer this one, but i would think since you're a small business owner you can explain that it's a business account and those are transactions related to business. Probably what you said where you will just have to show invoices.

 

Seems you need to have a discussion with your loan officer to calm down some of your fears :smileyhappy:

Lender Pull (11/3/12) FICO EX: 740 EQ: 680 TU: 702

NFCU VISA $17.5k / USAA AMEX $6k / USAA AMEX $4k / USAA VISA $4k / CHASE FREEDOM $3k / Capital One $500
Valued Contributor
Mike_B03
Posts: 1,141
Registered: ‎11-30-2012

Re: Got Loan Approval Conditions...WHOA!

Spoke with the loan processor today and he was really helpful in explaining everything and really helped put me at ease.

The initial list of conditions seemed to be something that the DU system seem to spit out and wasn't actually reviewed by a person yet. Once it was reviews, some items were noted as "Completed" since we already submitted them, other items disappeared, and others were categorized by "Needed Now" and "Needed 40-45 days before closing."

 

1. On the earnest money, all we need to show is that we took cash out of the bank sometime prior to making the earnest cashier's check. It doesn't even need to be in the exact amount of the check, just needs to cover the amount. Easy to meet that condition.

 

2. The condition to provide updated bank statements disappeared, I assume since we already submitted bank statements recently (prior to withdrawing the money from the account). So that solves that.

 

3. The P&L and 2012 taxes are under the category of "Required to Fulfill Prior to Closing". Again, easy to meet.

I'm feeling pretty good about things right now. The rest of the conditions are very easy...copy of Soc. Security card, explain a credit inquiry, stuff like that.

I did ask what the process is since it's a new build and basically once we meet the conditions needed now, they will give us a "Conditional Loan Approval" document. Then after we file taxes, we will get a "Final Credit Approval" (or something along those lines). We can't lock in a rate until 30-45 days prior to closing I believe, so we just have to float it until then.


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