In Underwriting...PLEASE HELP ME MAKE SENSE OF THIS!!!

[tooleman694]

You have to fit the guidelines and then the UW has to feel good about the loan. We were in the guidelines, because with a non-purchasing spouse FHA says they dont count the spouses credit problems against you. However the UW can make a call if they dont feel good about it.

There was probably an UW somewhere in the world that would have approved it. But mine was probably PMSing or something and wanted to ruin other peoples lives because she was in a bad mood lol.

[Mike_B03]

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@tooleman694 wrote:

We started the process this time last year, we sold our home and built a new one. When it came time to close during the summer we were denied, leaving us homeless.

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Wow man sorry to hear that. So was the loan originally approved with conditions and then when it came time for the final approval at closing, you were denied? Or did they start building the house and you never went through underwriting until the house was almost complete?

That is my biggest fear in this whole process, that we get approved now...go through the whole 6 month process of seeing the house being built and getting all attached, and then not being able to close.

[tooleman694]

We were approved with the automated system. Our LO said that since we were approved and we fit the guidelines we shouldnt have a problem.

FHA says they cant count your spouses credit if you do a non-purchasing spouse loan.

So we went forward and built the house, when it was about time to close we went thru underwriting and was denied. Our underwriter didn't feel good about the loan. We were living with our parents for short term after our home sold waiting for the house to be completed.

Then after the terrible news, we went out and rented a town home. My realtor worked with the builder and they agreed that if we passed thru underwriting we could build another home. So we went thru it again, approved with the automated system and they sent it to underwriting. We were then approved with a condition that we could not close till April. A full 12 months past my Wife's last late.

We started building a new home, and it will be ready in April. Its all framed now, we have our pre drywall meeting in 2 weeks.

3 months to go.

We will have to go thru underwriting again, because my credit reports expired. But we have nothing new bad so we are good.

[Mike_B03]

Wow what a roller coaster that must have been. Great to hear that it should work out in the end.

I'm surprised that the builder was ok waiting so long to find out about the loan actually being good or not. In our situation, there are some deadlines we have to meet, such as providing a "Letter of Loan Approval" within 60 days of signing the sales contract so we're in underwriting now and I'm hopeful. The house construction is "approved" but it's not scheduled to beging construction until February, which we should know far before that if we have loan approval or not. The loan approval will still be conditional, as the final approal can't be given until you're 30 days from being able to close from what I understood. As in your situation, we'll have to have the credit pulled again and documents updated at that time but if we get "Conditional Approval" now, we should be good to go as long as nothing changes in our situation (they aren't going to re-evaluate the loan again from my understanding, just making sure the credit is still ok etc).

[tooleman694]

It used to be a sure thing if you passed the automated system UW would approve you. These days with the UW all paranoid that is no longer the case.

Now my the builder we are using wont start building unless you have automated approval and have gone thru underwriting.

That way they know you will close, unless I do something stupid and not pay bills. Everything has to be perfect, they will repull us in late Feb or early March.

Will have to give updated bank statements, tax forms yada yada yada yada. It will be smooth this time around for our April 2nd closing.

Lesson learned about credit.

Sucky thing, if this was still 2007 we would have been in our home. Back when they didn't do a full cavity search before you closed.

[Mike_B03]

It was crazy how easy it was to buy a house 5 years ago, I know people who literally bought 12 homes to try and flip them. It was all stated income, no one even verified your employment or bank accounts or anything, it was nuts.

Now it's the complete opposite but I have to say I don't think it's a bad thing. Buying a home shouldn't be as easy as buying a car. It's a big purchase and peope should be qualified. I wish it was easier because then I wouldn't be stressed about it 24/7 but in the long run I think it's better for everyone.

Did you end up going with a different bulder/house/community or are you still buying the same house you had originally wanted?

[tooleman694]

Its actually funny how it all turned out. We are using the same builder in the same neighborhood, but after we ran into the problems the builder was trying to close out of the phase they were in so we were able to build the same home in the phase we were building in for way way cheaper. They are moving into the next phase and wanted to close out of the lots they had left. So we grabbed one of the last ones. Saving us thousands of dollars.

So yeah it was hard to go thru what we did, and it sucks to be stuck in this town home. But when this is all done, we will be in a much better position. Maybe it was fate. All of this happened for a reason. We learned a tough life lesson, and saved thousands. Im talking like 20 percent off. Its huge. They pretty much sold the home with the land free.

[Mike_B03]

I sent you a PM Tooleman.

[tooleman694]

Pmed you back.

[Anonymous]

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@tooleman694 wrote:

Its actually funny how it all turned out. We are using the same builder in the same neighborhood, but after we ran into the problems the builder was trying to close out of the phase they were in so we were able to build the same home in the phase we were building in for way way cheaper. They are moving into the next phase and wanted to close out of the lots they had left. So we grabbed one of the last ones. Saving us thousands of dollars.

So yeah it was hard to go thru what we did, and it sucks to be stuck in this town home. But when this is all done, we will be in a much better position. Maybe it was fate. All of this happened for a reason. We learned a tough life lesson, and saved thousands. Im talking like 20 percent off. Its huge. They pretty much sold the home with the land free.

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I'm glad it worked out for you!