Credit Cards Center Credit cards from our partners
Reply
Regular Contributor
Posts: 187
Registered: ‎11-20-2008
0

Surprised! FHA Automated Underwriting approved, what to expect next?

Hello All, its been very educational reading these boards for information.

 

Six weeks ago my wife and I decided our rental was just too small and we needed to move. Rent on houses we liked was going to be in the neighborhood of $1600-1800/mo, so we were encouraged to look into buying a house. I hadn't considered it for two reasons, 1) Potential of moving across the country in the next 18-24 months, 2) Owning a business, knowing what others have gone through with that.

 

My wife and I have about 50% utilization on our revolving, and she has some old hospital collections reporting.

 

Our DTI on the backend was about 52.5%. We were prepared to pay off a car loan to get that ratio down if needed. However our mortgage guy submitted without paying the car off first. Between my personal and business accounts, I have about the same amount of cash to our revolving debt balances, since all my clients are trying to get orders in before end of year.

 

FHA automated underwriting approved us. I want to celebrate, but I'm curious what to expect next? How confident should I be about things at this point? 

------------------------------------------------

What's in my wallet?

Amex Blue Cash Preferred and Capital One Spark Business.
New Visitor
Posts: 8,388
Registered: ‎09-28-2007
0

Re: Surprised! FHA Automated Underwriting approved, what to expect next?

52.5% is pretty high for the back-end, it may require additional underwriting approval by an underwriting manager.  I'd check with your loan officer if they have any overlay guidelines such as that.  However if you pay off the car loan, then your debt ratio should sink below 50%, and you should find the approval process a little easier.

 

Why might you move out of the area in 18-24 months?  Realize that there are costs involved in selling a home.  If you have no desire to become a landlord and rent out the home if you need to move across the country, then you'll want to sell the home.  Usually typical costs are about 1-2% of the sales price for the sellers closing costs, and then another 6% of the price for the real estate agents commission (both the buyers & sellers combined).  If the home goes up in value, then those costs are just deducted from the sales price, and after your mortgage is paid off, hopefully you'd have netted some profit, or worst case just break even.  However if the home's value remains the same, or declines, then you may find yourself having to come in with funds in order to sell the home.  Add those costs to the amount of rent you'll pay for 18-24 months, determine what type of income tax breaks you may get by owning the home (paying mortgage interest & property taxes), and use that to determine if it'll be better for your family and it's finances to rent or buy.

Regular Contributor
Posts: 187
Registered: ‎11-20-2008
0

Re: Surprised! FHA Automated Underwriting approved, what to expect next?

Just an update - the only real 'headaches' were the 203K part, getting bids in, LOE for my wife when she stopped working to go to school, and verification of some deposits in my business account - they seemed very at random and had no rhyme or reason (not questioning a 7k deposit but a 550 one). Other than that, I admit it was less of a headache that I had prepared for it to be. We closed on the 19th, and the renovations have begun. 

 

We didn't have to pay off the car loan, in fact, after the rescore, where we both had mid-scores over 640, the credit was never an issue. They didn't pull right before closing either (both our scores have jumped 40 points since too).

 

Our renovations go well beyond our 203K writeup, and the appraiser gave us 40K equity in the property with the proposed improvements, our total improvements should net another 30K conservatively...so this story has a happy ending and we are happy we did the K loan. Yes, my interest rate is a little higher than I'd like, but with the likelyhood of us only staying there 2-4 years (I will try to hold onto it and rent out if possible, perhaps have a home in Cali as well as this one), I'm not worried. Once I have 20% equity I'll refinance to a conventional.

 

Anyway, i think FHA automated underwriting approval is as close to a golden ticket as you can get nowadays, we had older collections, a high DTI, but with good cash reserves, 401K, and evidence of improving income, our process was fairly easy. "No news is good news", we didn't really get any more verification requirements until a week before closing, and they were easy to get (invoices and check stubs).

------------------------------------------------

What's in my wallet?

Amex Blue Cash Preferred and Capital One Spark Business.
Valued Member
Posts: 36
Registered: ‎08-17-2010
0

Re: Surprised! FHA Automated Underwriting approved, what to expect next?

Congrats! Which lender did you go with?  If you don't mind me asking.


Starting Score: 574
Current Score: 693
Goal Score: 730


Take the FICO Fitness Challenge
New Visitor
Posts: 1
Registered: ‎04-09-2012
0

Re: Surprised! FHA Automated Underwriting approved, what to expect next?

Hello, What you need to expect now is that the lender may have a different criteria for approval. Good Luck

Established Member
Posts: 7,405
Registered: ‎07-03-2007
0

Re: Surprised! FHA Automated Underwriting approved, what to expect next?


700orbust wrote:

 

Anyway, i think FHA automated underwriting approval is as close to a golden ticket as you can get nowadays,



not really.

 

any loan monkey can make the computer spit out an approval when you have zero chance of qualifying.

 

i only mention this for others reading your great story.... let's not get their hopes up.

 

 

* While I try to visit the forum often, please feel free to contact me directly with a link to your post if I fail to answer a follow up question.

* Lending across the entire 'Great State of Texas' (and now Louisiana)since 2004

* The Loan Officer who you can call anytime... and answers your questions Nights & Weekends

Regular Contributor
Posts: 187
Registered: ‎11-20-2008
0

Re: Surprised! FHA Automated Underwriting approved, what to expect next?

Do you realize that you dug up an old post? When I was applying for this loan, it was a pretty significant indication. Aside from a few some UW requests, all went perfectly smooth. So my "great" story had a great ending. 

 

As always, your mileage may vary. 

 

I don't understand how people fail to evaluate the time in which information was posted. I don't heed computer purchasing advice from a thread dated 2006, that would be pretty dumb wouldn't it?

------------------------------------------------

What's in my wallet?

Amex Blue Cash Preferred and Capital One Spark Business.
Moderator Emerita
Posts: 3,090
Registered: ‎08-09-2008
0

Re: Surprised! FHA Automated Underwriting approved, what to expect next?

Sometimes, people surf in after having Googled something, and simply don't notice the teenie tiny date under the header... it's a common mistake. Once it gets bumped up, it's readily assumed (even by the regulars) that it's a recent/relevant topic. An honest mistake... Happens to everyone. Smiley Happy

 

It's a good idea, though, to just point out that the topic is old, keeping everyting friendly, and respectful.

-------------------------------------------


Friendly, Supportive & Respectful


Understanding Your FICO Score  |  Credit Scoring 101  |  Common Abbreviations  |  FTC: FCRA Links  |  FTC: FDCPA Links  |  Opt-Out  |  State Resources


"However gradual may be the growth of confidence, that of credit requires still more time to arrive at maturity” ~ Benjamin Disraeli

Forums posts are not provided or commissioned by FICO. Forums posts have not been reviewed, approved or otherwise endorsed by FICO. It is not FICO's responsibility to ensure all posts and/or questions are answered.

Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.
† Credit cards for FICO Score ranges: The score ranges are guidelines based on internal myFICO analysis of actual applicant approvals, and having a FICO Score in a particular range does not guarantee you will be approved for credit cards recommended in that range. These ranges were not provided by any card issuer.

Copyright ©2001-2015 Fair Isaac Corporation. All rights reserved.   | Terms of Use | Privacy Policy | Sitemap

IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more

FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.