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Buying a new home. My current home has an HOA payment. The thing is that it does not show up on my credit report. What if I didn't mention that I have an HOA payment when I buy my new house. Would they ever even know?
@Anonymous wrote:
Buying a new home. My current home has an HOA payment. The thing is that it does not show up on my credit report. What if I didn't mention that I have an HOA payment when I buy my new house. Would they ever even know?
I believe your association fees must be factored into your back-end DTI calculation. It's the "A" in PITIA, which is the applicable acronym in housing debt calculations when there is an association fee.
Your property taxes and homeowners insurance do not appear on your credit reports either, yet you are required to disclose this. If you choose to omit your association fees and this gets discovered during the underwriting process (and my guess is that it will almost certainly be discovered), your application could be rejected. Furthermore, since the omission of this information would be a willful act on your part, you may at risk for losing your earnest money deposit if the sale doesn't go through. Tread carefully.
The typical underwriting conditions include: last tax bill, and the insurance bill (single family home) or HOA invoice (condo...in lieu of invoice, cancelled checks or annual invoice). On a townhome or PUD, some combo of insurance plus HOA.
A really bad loan officer will miss it up front, but it WILL be caught by the underwriter...or worse, at closing. To Lel's point, it's pretty hard to get earnest money returned after you 've waived a contingency and the nature of the denial is fraud. On the loan application it will go under the real estate owned section and it'll be part of disclosure #1.
Just my $.02,