IF YOU WERE MY LO, YOU WOULD ...

[shawneet]

Hello MyFico Family ...

I read the postings in the forum ALL THE TIME and try to learn as much as I can from you all ... as they say, "Experience is the best teacher" and you guys have a LOT of experience! So, with that being said, I'm hoping that someone could lend an ear and then a few answers to my situation.  Here goes:

My husband and I are looking to build a home ... we've found the community we like, found the lot, put a deposit down, completed the loan app, and have gotten pre-qualified.  We are currently buying the home that we are in but we will be renting it out once we close on the new home.  The current home was also figured into our liabilites, so we are okay with that.  Now, here is the sticky part.  There is a mtg late on my husband's credit report that won't be a year old until July 2013.  All else on our CR is okay.  No collections, no BK, one CO back in 2010 that had a $200 bal but with interest and whatever else, I think now it's like $500 dollars, but the LO didnt seem too concerned about that.  She wanted to put us into an FHA loan with the 3.5% DP but the system kicked us out because of the mtg late (she said).  So, she placed us in a conv loan at 3.9% with 10% DP (home purchase price is 275,680. 

Well, we don't have 27K but she said that it's okay because our situation will be changed by the summer (late mtg will be a year old and I will then show 2 years on my job - but same profession for 7 years --hubby same job for 15 yrs) and then she can put us into the FHA loan or another program with less DP and possibly a better interest rate. 

Okay, so now we're waiting on the commitment letter from the bank.  Will we still be able to get a commitment letter with the situation as it is currently? And why is it taking so long? It's been 30 days as of yesterday and per the purchase contract, we have 45 days to show the builder/seller a loan commitment.  We're positive that there will be conditions (obviously) and we're okay with that but we just want to know what could possibly be taking so long.  No response from the LO yet ... I contacted her about 4 days ago.  I don't want to seem pushy but I would like to know the status.  I don't want to be denied (and she sounded so positive about our loan/situation) and I don't want to lose my deposit that was placed.  The builder has placed a SOLD sign on our lot (which brought a smile to my face) but I need to be certain about my loan.  If you were my LO, you would ... do what? Is this the norm?

[foofighter74]

If you're going to build a home, I'm not sure why you can't just get pre-approved for an FHA loan now...with the obvious condition being that you can't have any lates within the last year prior to closing. 

Assuming they started construction on May 1st, you wouldn't actually close on the home until the end of the summer at the earliest. 

We were pre-approved back in January...and got a conditional approval from the lender that was good enough for the builder to start construction in late March.  They gave us several conditions, but they didn't have to be met until the house is finished.  In other words, because you're building, and the late will be a year old during construction...I don't know what the issue is.

As for applying for a conventional loan, if you don't have the 27,000 down payment, and there's no clear source for those funds included in your file...I would think pre-approval would be a bit more difficult.  Seems to me it would have been easier to manually UW the FHA pre-approval, issue the letter, and then have you apply for the actual loan in July as the house is being built.

But all lenders do things differently.

[shawneet]

Boy do I wish that you WERE my LO!! Your way of doing things sure does sound like the easier way to go.  I have no idea why she went the route she went because the construction isn't due to be completed until tentatively August - October 2013.   This whole process is turning into a weight-loss system for me, that's for sure!!  I'm really tempted to give her a call today to find out what the status is.  I pray that there aren't any problems ... (fingers, toes, AND eyes crossed!)  Thanks foofighter for your advice. 

[foofighter74]

When was the last time  you were updated? Not the last time YOU communicated to the LO, but the last time you heard something from them?

[lpayton]

The length of time seems suspect.  Especially your LO not calling you back for 4 days..that is not excusable, it is unprofessional and rude.

Who is your lender? Have you tried Wells Fargo? They seem to be much more lenient than other lenders.

[foofighter74]

I wouldn't go anywhere near Wells Fargo.  Some people have good experiences with them, but they seem to be the exception, not the rule. 

[lpayton]

WF is definately a YMMV situation, just trying to throw out ideas for her though. 

[prince1969]

I am going through Wells Fargo now. The loan officer was also the branch manager and I will have to say he keeps me informed. Has called sometimes after 6 pm. So far I have been please. I am purchasing a HUD foreclosure so this is not an easy process and HUD makes it more difficult. But so far so good.

[shawneet]

The last time I heard from the LO was on 3/25.  We talked briefly on the phone and she told me that everything was going well and no to worry about that 10% because what we needed to concentrate on was getting the letter over to the builder because of the 45 day deadline.  (We signed the contract on 3/17).  On 4/8, the contract administrator from the builder emailed all parties involved (including the LO) the latest pricing addendum which included all of our options and upgrades, which also updated the bottom line on our purchase price.  I called the LO on Monday, 4/15 just to touch base and no response yet.  I'm getting a little ticked but a lot worried ... trying to not let my mind go crazy with speculations, but really, what's going on?

[foofighter74]

---

@shawneet wrote:

My husband and I are looking to build a home ... we've found the community we like, found the lot, put a deposit down, completed the loan app, and have gotten pre-qualified. 

---

Who are you financing through? Does the builder have an in-house lender that you're going through? because if that's the case, they may have already given the builder a commitment.  Or they may not have.

Regardless...you will hear a lot of people tell you that inhouse lenders are more lenient than other lenders because they want to push through the sale of another home for obvious reasons - it helps the entire company.

But those places are terrified of having a loan they can't sell - they don't want to service mortgages, they want to sell houses...and they have a mortgage arm of their company simply because it makes things a little easier for customers to buy and close on a home.  So, they sell the house, and they sell the mortgage...and in the experiences i've heard about, as well as my own, they're far more strict than other lenders.