The Official NACA mortgage thread

[lrmatthews18]

Hi Everyone!

I usually post on the NACA forum, but it has been down for a couple of days so I thought I would post here.  This may be a rather long post, but I am trying to make the NACA process as easy as it can be for someone else.  So if this long post can help one person it was worth it.

I started the NACA process back in Aug 2011.  I had a baby in September 2011, so I had to stop the process for a short while, but got back on the ban wagon in November.  I think I have had every pit fall or LOX to write known to man, but it is all worth it in the end.  Below are some tips that I learned along the way... I just signed my bank app today and locked in my rate and it feels great!  I know it will feel better when I close.

1.  THIS IS REALLY IMPORTANT IN MY OPINION- IF AT ALL POSSIBLE TRY TO GET A RECOMMENDATION BEFORE YOU MAKE YOUR INTAKE APPOINTMENT WITH A COUNSELOR.  If you know someone who went through the process ask who their counselor was or at the purchase workshop ask the volunteers who their mortgage counselor is and if they would work with them again if they had to do the process all over again.  Your mortgage counselor (MC) can make a huge difference on your NACA experience.  Your MC is your lifeline.

2.  If you are not an organized person GET organized, fast! My suggestion and what worked for me was a large 3 ring binder with tabs.  I had each section labeled as below and organized by date:

- Check Stubs

- Cancelled Rent Checks

- Bank Statements

- Extra Info (Car note statement, credit card statements...ect)

- Letters of Explanations (LOX)

- NACA Documents (MRF sheet, Budget, qualifying letter)

3.  You MC will ask for things you already sent them.  If you are organized you can send it again within 5 minutes and problem solved.  Don't argue with the MC, just send it.  

4.  Try to be one step ahead of your MC/ underwriter (UW).  For example, if you have multiple addresses on your credit report because you moved, have a short LOX to explain why you lived at that address and for how long.

5.  Your MC gets a lot of e-mails and phone calls a day, more than likely, they will get back to you within 48 hours, unless you have a MC that is on top of things and will get back to you the same day.  You have to remember that most of these MCs are overworked.  If you don't get a response in 48 hours simply send a follow up e-mail.

6.  Fully Understand how Payment Shock is calculated!  This caused me to not be qualified for a couple of months because I was just moving money from my checking and putting it in my savings.  Calculating your PS is more than moving money.  Not only does your savings accounts need to increase each month but ALL of your accounts must increase or stay the same each month.  (send me an e-mail if you need more help understanding)

7.  Know that if you pay more money on your credit card than the minimum payment you can use that towards payment shock.  My MC did not tell me this and a friend told me.  It came in handy as it helped me get NACA Qualified.

8.  Bank Statements- Make sure when you submit your bank statements that they have your full name, address and account number.  Also, send all of the pages or it will not be accepted.  So if you leave off the last page and your statement says page 8 of 9 and page 9 is missing even if nothing is on it, it will not be accepted.  Also, if you ever go to the bank and get them to print things for you make sure the bank stamps each page with their official stamp.

9.  If you haven't had your intake meeting or your intake meeting is a couple of months away, start saving your payment shock now.  A big hold up for people is payment shock.

Letters of Explanations that I wrote:

1.  Why rent check changes each month- My rent check includes both rent and utilities and my utilities change every month, so the UW needed an LOX for that.

2.  Addresses on my credit report- I had to explain all of the addresses on my credit report and how long I lived at the addresses.

3.  Gift Letter Explanation- I had to explain that my mom was giving me a gift in addition to having her and her bank fill out the gift letter form.

4. One of my checking accounts didn't have activity on it in a couple of months and I had to go to the bank and get them to write a letter stating that there was no activity on the account.

There were a couple of more LOXs I had to write, but I can't remember them right now.

The UWs are extremely picky so definitely be ready and patient.

Home Buying Tips:

- Work with a realtor that is willing to or has been to the NACA realtor's workshop.  I did not do this and it made my life a lot harder.

- Know that HOA fees are calculated in your qualifying amount.  I did not know this and it was a huge headache for me since my HOA fees are kind of high.  

- Know that the new construction process is different than the existing home process.  I am buying a new construction home and it is not built yet, but I still was able to lock my rate in.  It's not different by a lot, but there are a couple of things that are different.

I would say the biggest thing I learned was to not enter into a contract before being NACA Qualified.  I did because they were selling out of the town home I wanted.  Everything did end up working out in the end, but I put more stress on myself than I had to if I would have just waited.  NACA tells you not to enter into a contract without their approval and that is because they are very slow, but where else can you get a rate of 3.5% with no closing cost, down payment and the option to buy down your rate?

I am now in the bank app phase so I will see what the CITI UWs throw my way seeing how I no longer have to deal with the NACA UWs.  

Patience and organization are key in this process.

And remember to be proactive instead of reactive.  It will make your life a lot easier.

Even if your MC makes you mad, make sure to treat them with respect and keep your cool.  Would you want to help someone who just cursed you out over the phone, NO.  Yes, some are better than others, but they are human too and just want respect.  Remember they have something you want, not the other way around.

Hopes this Helps!  If you have any questions just let me know.

[Anonymous]

Wow Irmatthews18 what a post and very informative. Welcome to the NACA family and please continue to keep us in the loop throughout your process. I'll see you in the closer's club soon.

[lrmatthews18]

Thank you!

It really is a great feeling!

[chasmith]

I just moved into a townhome, part of a small (14 units) group of new construction, but with a small HOA and fee to basically coordinate architectural changes and refresh the flowerbeds.

This became a big deal with Citi - you need to get the PUD questionnaire for your builder to fill out.  They will want proof of insurance for the HOA (in my case the HOA didn't own anything and so couldn't have insurance). 

Just when I thought I was ready the HOA stuff leaped out of the woodwork and cost three days to resolve.

[lrmatthews18]

Thank you. When did Citi ask for this info? My townhome won't be ready until August.

[chasmith]

When I expected the clear to close. 

First they wanted the PUD questionnaire.  Then the appraisal needed to be updates - fortunately the appraiser included me on his email request to the seller and I forwarded the PUD questionnaire which gacvve him what was needed.  Finally they popped up with the request for insurance.

Remember, you're through the first round by qualifying - and I think you'll need to requalify regularly until your home is finished.  Don't make any mistakes during that period!

Then you have to deal with the final home inspection, HAND approval, an as-built update to your appraisal, and closing items like insurance. Citi may ask for resubmissions of things you've supplied before (tax returns, divorce decree in my case).

Dealing with Citi to get to closing felt like qualifying all over except the MC is two steps removed from the bank.  As an added challenge a different MC had to set up my closing due to licensing issues.

There's a section at the bottom of your webfile where you can see the flow (but not always the details) among your closing MC, the NACA broker, and the lender.  It seems the bank passes things from department top department and so you see repeat questions.

[lrmatthews18]

Thank you so much for this valuable information! It helps me keep things in perspective.

[chasmith]

I do want to be clear, the process of getting to "clear to close" is based on the lender (Citi) not NACA, and from what I've seen here and in other forums it's not at all unique to NACA.  In fact some of what we did to qualify makes it easier, as do the better habits learned while qualifying. 

The only NACA piece was the inspection, and that went smoothly from the NACA approved inspector to HAND and back.  I did have to pay for a reinspection to clear some items called out in the inspection report, but that whole process went smoothly.  But bear in mind NACA does mostly resales not new construction so they are used to seeing the inspection at contract time, not when you're trying to close.

[lrmatthews18]

I guess I better buckle up and get ready for the Citi roller coster.

[chef06]

Thats great info!   I wish I had this insight a year ago when I had my intake appt.  But I'm happy to say that just this morning I recieved news that I'm NACA Qualified!!

Now this Thursday I go to the Buyers Workshop.   Patience is key!!!!