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Likelihood of FHA UW denial with new $87 balance on credit card

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Anonymous
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Likelihood of FHA UW denial with new $87 balance on credit card

We applied for FHA in February, had prequalification, then 2 days later the pre approval. 2/14 found a house and made an offer. Jumped through all the hoops got a conditional approval from UW 2/25. Our conditions were super easy and had everything turned in 3/4. We had a hiccup in the appraisal (it wasnt ordered until 3/2, 2 days before our LO wanted everything turned in) appraisal came back for more than we offered. Went straight back to UW. Today the LO calls and says that it was kicked out of UW bc the soft credit pull showed a new credit card balance of $87. So credit was repulled with a hard inquiry to see if credit score had gone down. (Obviously it had. It dropped 28 points but 4 days after she originally pulled the report it had gone up 40 points so technically it's still higher now than it was when she repulled it) but she assured me we are still good to go. She said she sent it back to UW with a rush (our closing is supposed to be Monday 3/14) she said it may delay our closing. But my main concern right now is do you think this will get us denied? Our DTI isn't high at all. We pay $925 rent and have never been late (our landlord lives right behind us haha) we have a car payment of $630 a month that will Paid off in about 9 months, and now an $87 balance on a credit card we already had. I wish my LO had told me when I sent her the statement from feb (which was $0) not to put anything else on it otherwise I'd had paid the full Balance before the March statement generated! She said she has her assistant working on our closing terms that have to be ready to turn in tomorrow to the title company. Would they still push this hard if it were to be denied? My whole house I packed up (along with 3 children's belongings) this has definitely been a roller coaster that I am ready to get off of! Any insight would be greatly appreciated. My agent is confident we will be ok as well even if we have to delay a week or 2.

Message 1 of 10
9 REPLIES 9
Anonymous
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Re: Likelihood of FHA UW denial with new $87 balance on credit card

What is your score that the LO is submitting to UW?  If you are above a 620, have verifiable income, low DTI, and a good payment history you will be fine. 

 

I can not believe that $87 lowered your score by 28 points...  Did something else show up?  Is your credit limit low?  Is this a new credit card?

Message 2 of 10
Anonymous
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Re: Likelihood of FHA UW denial with new $87 balance on credit card

It was also lowered due to another hard inquiry made by the lender after 30 days. We were approved for the card in January but I always paid the balance (if there was one) before a statement generated so in Feb we had a $0 balance. I was going to do this with March but with all the hoops I've jumped Thru I forgot it. And yes the limit is low as its our first ever card to help build our score/history. But we just got the phone call, we are CTC Smiley Happy
Message 3 of 10
Anonymous
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Re: Likelihood of FHA UW denial with new $87 balance on credit card

Congrats!!! What lender did you go with? If you don't mind me asking? Thanks!

Message 4 of 10
Anonymous
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Re: Likelihood of FHA UW denial with new $87 balance on credit card

Bama585655 we used FirstCalTexas but they're actually based out of California. First California mortgage company. Our LO was awesome!

Message 5 of 10
cem13
Established Contributor

Re: Likelihood of FHA UW denial with new $87 balance on credit card

To all gracious Grasshoppers:  let this be a lesson to all those who are thinking of a mortgage.  

 

My Mortgage company did a soft pull EVERY-SINGLE-DAY from approval to 3 days after closing.  They even pulled it the day I closed and that was at 10am.  Since I was a proud member of this great community; I already knew not to allow any balances to hit.  Also I knew not to apply for any CCs or other credit products until three days after closing.

 

I was forced to sign a paper that I did not plan on buying any major items for 1 year.  I asked for a clear definition of what "plan and major" was.  The answer was, "You know, anything major".  They were planning on selling my mortgage anyway and needed some assurances that I would not derail my credit before they sold it.

 

I wanted to stock up on some beer that was on sale at Sams Club and my wife was so nervous.  She thinks 6 cases of beer is "major".

FICO 08 JUL23: TU 850; EQ 846; EX 843. Clean since BK7 D/C 6/2011.
Message 6 of 10
Anonymous
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Re: Likelihood of FHA UW denial with new $87 balance on credit card

Thank you!

Message 7 of 10
ashjt2011
Regular Contributor

Re: Likelihood of FHA UW denial with new $87 balance on credit card

I wouldn't worry to much about a 87 dollar increase in balances. The closing might be delayed slightly, thats the only thing I would be worried about.

 

The only reason that it might decline you is if your score dropped below the minimum (which it doesn't sound like it did) or because you were so close in your DTI ratios and the 87 dollars pushed you over the edge (but it doesn't sound like it would either).

 

I would breathe, relax, look forward to closing and starting celebrating the fact you'll be moving in soon! 

Message 8 of 10
Anonymous
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Re: Likelihood of FHA UW denial with new $87 balance on credit card

Thank you all! We got our clear to close and close Monday morning! I'm super excited but stressed out because we have too many belongs to move haha!!

Cem13, this wasn't a new card, it was one we had as a building tool and history tool. Normally I don't have a balance as I usually pay it off before a statement generates but this time it generated before I paid it. No one told me to not let a balance pop up. But it's ok, now we know and it worked out in the long run. Smiley Happy
Message 9 of 10
Anonymous
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Re: Likelihood of FHA UW denial with new $87 balance on credit card

 

I am going to piggy back this for a second and maybe rant which may sound crazy

 

 

This is the  thing that irritates me the most about mortgage loans. Really an 87 dollar balance on a credit card made them do all that? It's amazing for 30-60 days the mortgage companies expect you to jump Depending on card max. 87 dollars is as petty as they come to get kicked out of UW for, if you went and spent 3000 on a vacation then i can understand but 87 dollars?

 

I can understand not going out and buying new cars and furniture but 87 bucks?

 

I love how they expect you to just freeze your life so that they can spend the 4 weeks scrutinizing you and threatening to take a loan away over 87 bucks.  God forbid grandma dies and you have to fly to the funeral. The UW might ask for a death certificate or pull a Mr Edward Rooney and make you roll her down to the bank so the UW can see first hand shes dead to make sure you just didnt take a weekend cruise.

 

I can understand they want to make sure you don't spend your downpayment and closing costs but if those funds are in a separate account then you should be able to use your money, it is yours after all.  What is stopping you the day after you close on the loan to go out and buy a 50k sports car to celebrate. Your DTI just busted and now there is nothing that can be done because most likely the mortgage hasn't been posted to credit.

 

But am glad you were still able to close and all is well.

 

 

 

 

 

 

 

Message 10 of 10
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