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Nervous about underwriting... not all accounts are being reported

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OldHouseLover
New Member

Nervous about underwriting... not all accounts are being reported

Hi everyone.

 

I am requesting a bit of advice here, as I think my situation is unique. We are applying for a mortgage with Wells Fargo. It is a program with our local union, and the interest rate is crazy low. We found the perfect house, and it's way below our price range. I am nervous because I have student loans and a personal loan that aren't showing up in my credit report. I told the LO about the accounts after we went through pre approval, and she said it wouldn't be a problem. Here are our financials:

 

My salary: 65,000, four years at job

DH salary: 85,000, five years at job

My credit scores: 698, 715, 758 

DH credit scores: I don't know but all around 800

House price: 175,000, 5% down

 

My monthly debt payments: $641 personal loan, $181 student loan, $ 150 credit card, and my car is paid off as of 2 weeks ago

DH monthly debt payments: $ 100 credit card, $200 car payment which is almost paid for

 

Reason #1 why I am nervous: I have about 90k in student loans (I have 2 graduate degrees), and my payment is $181 per month. My loans are not being reported on my credit report for some reason, even though I've been making on time payments for three years.

 

Reason #2 why I am nervous: I had credit card and medical bill debt that I consolidated into a lower interest personal loan last month for $19,000 (I didn't know last month that we'd find the perfect house and apply for a mortgage so soon, which is why I applied for the consolidation loan). The payments are $641 per month for three years.

 

When we got approved, my credit report showed higher balances on my credit cards and not the 19k loan. Now that I got the loan and paid off my CCs, my credit score jumped up a lot, and my DTI ratio is pretty much the same since all the cards were paid off with this consolidation loan.

 

LO saw the $19,000 deposit into my checking and said it was going to require an explanation when we go to underwriting.

 

Here's what I was thinking of doing: I am going to send the bank my student loan statement showing a $181 payment, CC statements showing a zero balance, and a letter from Ally showing I paid off my car loan, and a statement from the personal loan showing it's brand new and the total balance and payments. I was also going to include a letter saying, look, I know this isn't being reported on my credit report, but this is everything I owe and here are my payments. Should this be enough for underwriting? Will this new loan really hurt me? Does anyone have any other suggestions? I don't want any surprises and heartbreak right before closing.

 

Thanks!

 

Message 1 of 6
5 REPLIES 5
Ron6262
Regular Contributor

Re: Nervous about underwriting... not all accounts are being reported

     This is my advice, dont worry about what isnt showing or asked for.  Only worry about what the LO or UW brings up and asks you to document.  With your scores you will slide right thru.  Dont overcomplicate it by trying to explain things that are not even on the credit right off the bat.

Message 2 of 6
OldHouseLover
New Member

Re: Nervous about underwriting... not all accounts are being reported

Thanks for your reply!

 

I have to explain everything since they saw the student loan payments and the 19k deposit in my bank statement.

Message 3 of 6
webhopper
Moderator Emeritus

Re: Nervous about underwriting... not all accounts are being reported


@OldHouseLover wrote:

Thanks for your reply!

 

I have to explain everything since they saw the student loan payments and the 19k deposit in my bank statement.


Just explain that the loan was for a consolidation of the medical bill and CC.  as long as you didn't borrow that money to put down on the house, there shouldn't be a problem.   The new loan only becomes a problem if you try to act like it isn't there and then they find out about it later.

FICO 9:
Filed Chapter 13 on 6/1/2017 after job loss. Discharged 6/1/2022.

Goal: Gardening!


Message 4 of 6
namvet
Established Contributor

Re: Nervous about underwriting... not all accounts are being reported


@Ron6262 wrote:

     This is my advice, dont worry about what isnt showing or asked for.  Only worry about what the LO or UW brings up and asks you to document.  With your scores you will slide right thru.  Dont overcomplicate it by trying to explain things that are not even on the credit right off the bat.


   +1  I agree and never over inform the underwriter.  Just be upfront with your LO and all will be ok!

Message 5 of 6
OldHouseLover
New Member

Re: Nervous about underwriting... not all accounts are being reported

Thanks. As per the LO, I do need to write a letter to the UW since the payments are coming out of my checking account and they saw it on my bank statement. I just hope that a brand new loan isn't going to be a huge red flag for them.

Message 6 of 6
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