Lender Response and Other Questions

[Arlenet125]

Hello,

Ive been working with a loan officer for around a year and a half now. Up until now she has been great and responding but lately its like pulling nails. When we started my credit was ok but my husbands was terrible. Now mines is ok for a loan but not as great as it was before. There all over the place at 702 657 and 632. My husband is still low but they said if we could get his to a minimum fha requirment of 580 by paying of a few credit cards of his they would do a rapid rescore and we could get our pre approval. They also told us we need 8400 for downpayment. We did all these things have the money and now its seems mums the word I cant get a straight answer or call back when she says she will. Last thing I got from her was a email saying i need more money for closing cost which she did not mention before. She is suppose to be leading me on the right direction but im not so sure she is. I emailed her asking how much for closing if there are other ways and she emailed a week later about maybe using seller credits? I just want to know what the real possibility we have for securing a loan with our credit, what exactly seller credit is and how it might work and what closing cost would be?

[TurboFX]

Find another person/lending institution to work with. Your LO doesn't seem to think that she can get your loan done. If you need a bigger down payment then it most likley means your credit score is lower or your dti is too high. She should tell you what is preventing you for getting a loan so you can work on it.

[StartingOver10]

Arlenet125

The issue is this, right now you and your husband don't qualify for a mortgage because the lender will use the lowest mid-score of the two of you. Your mid score is 657. His is less than 580. Since your husband's mid-score is less than the minimum required by your lender (less than 580), the loan can't be done right now.

That does not mean that you can't work on getting his credit score increased, it means you aren't quite ready yet.

As to seller credits:  when the contract is negotiated, negotiate in enough seller paid closing costs so you can close. You will need to have your own down payment funds (minimum of 3.5% of purchase price). Down payment funds can come from a gift if you have that resource - but not from the seller. But closing costs and pre-paid expenses can come from the seller, only if the seller agrees in writing in the contract. That is what she means by 'seller credits'.

I am a Realtor and not a lender. I usually use a very rough amount of closing costs of 4% (not including down payment). This is subject to change based on the actual taxes and insurance of the property the buyer purchases. It is a much better idea to get a figure from  your LO.

If you aren't satisfied with your LO, find another one.

However, your husband has some work to do on his credit before getting to the point of actually getting a pre-approval. Do you know what is holding your husband's score back? That would be the thing to attack. Does he have any recent cc's at all or is his credit only old derogatory items? If he has no currently open credit in good standing, that will prevent him from attaining a score high enough to qualify.