The Official NACA mortgage thread

[Anonymous]

Hi Tim, I've been reading up on the NACA process and just had a few questions.  I attended my first seminar on Saturday and received my NACA ID today. Tomorrow I will call and make an appointment at the Newark, NJ office.  I really appreciate any feedback you can give me on the below:

My situation

My current rent payment is $1275 per month.  I have been paying this for 4 years.  I have have all initial required documentation and completed the budget workbook. My goal is to show an additional $1000 in 'payment shock' savings starting on 4/1/16 through 7/1/16.  I am planning on transferring $1000 into my savings on the 29th of each month starting Friday.  If I can do this on April29th, May 29th, and June 29th I will have an additional $3000 in my savings account.

Lets say I have $10,000 currently in my checking account and I only have two accounts (one checking and one savings).

Questions (assuming I have an additional $3000 put away in my savings as of June 29th)

1. If my checking account balance after 3 months of payment shock drops to $9000 what monthly payment do I qualify for? $1942?

2. If my checking account balance drops to $7000 (basically showing zero payment shock) do I still qualify for a monthly mortgage payment of $1275?

3.  If my checking account balance rises to $12,000 do I qualify for a morgate payment of $2441?

4.  How many counselors do you have working in the Newark, NJ office?  

5.  Even though I am located in NJ would I be able to get a counselor from another area?  One with high availabilty?

Thanks for your time Tim, I have already learned a great deal reading your responses on this thread.  

Chris

[Anonymous]

Hi Chris,

The first and most important thing to remember is that determining whether or not you have saved your Payment Shock Savings has nothing whatsoever to do with which account the money is in. Payment Shock is determined by the sum total of all accounts and how much that total has increased month to month. You appear to be oversimplifying the means by which your qualified payment amount is determined. Rent plus Payment Shock is not the only determining factor. There are also limits based on your debt-to-income ratio, and potentially maximum acquisition cost limits as well.

Your questions also suggest that you are looking at determining your qualified payment amount, for lack of a better term, backwards. It isn’t a matter of how much can you save over three months in addition to your rent that determines your qualified payment amount. Instead, you and your counselor determine what your desired payment amount is, then you prove that you can make that payment by saving the difference between it and your rent each and every month without fail until you close on the new home.

In any event, you should be able to qualify for your rent amount even with zero Payment Shock. In fact right now, many people have zero Payment Shock because their proposed mortgage payment is less than their rent.

I don’t (actually can’t) keep track of how many counselors we have in which office at any given time. Plus, we are in the process of hiring more than 100 new counselors nationwide, so any numbers I might give would be a shot in the dark at best.

You may be working with the Remote Counseling program up until the point of qualification, but after that, by law you must work with someone licensed for the state in which you are buying the home. Every NACA counselor carries a heavy caseload, which is why we are conducting our nationwide hiring campaign, so I’m afraid “high availability” compared to any other counselor just isn’t a reality.

Patience and persistence are the two key elements to getting through the NACA process efficiently. I suggest you take the time to read the Home Buyer’s Workbook you received at the workshop cover-to-cover. You are in fact responsible for knowing what is in the workbook, and it will be a big help to you in working through the process.

Tim Trumble

Online Operations, NACA

ttrumble@naca.com

[Anonymous]

Thanks for your response Tim.  Yes I understand you need to see savings growth throughout all accounts.  As I stated, I am looking to demonstrate an additional $1000 in payment shock per month.  It may just be personal preference, but it is much easier for me to keep track of all my expenses through my checking account and keep my payment shock in a seperate savings account.

I agree that I may be looking at my qualified payment amount the wrong way.  I think it was a real eye opener when I completed my budget worksheet and realized how much money I was spending on food and other 'walking around' money.  This showed me that I can actually save between $800 and $1200 extra by adjusting my lifestyle.  Planning for it and actually doing are two different things though.  I could plan to save an additional $1200 but at the end of the month when I look at all my transactions maybe I only saved $900.  What happens in that case?

Also, what happens if I spend money on a vacation that month? If I factor my vacation into my annual budget there are no issues but it definitely would impact my monthly payment savings.

I am looking forward to starting this process with patience in mind.  I called this morning and the earliest available appointment in the Newark, NJ office is August 30th.  I guess that gives me plenty of time to work on my budget and get my net savings as high as possible.

Chris

[Anonymous]

Hello,

My appt is coming in NJ in 2 weeks, and I wanted to know since I have been living with my parents and I contibuted towards the mortgage every month (in cash no document) will this be an issue? or Will NACA will justput my shcok value to what I can actually afford based on my Debt ratio and Budget plan.

I am highly nervous of this appointment.

[Anonymous]

Hello lovlyn,

If you are not able to document any current rent as you state, your Payment Shock will automatically be the full amount of your proposed mortgage payment.

Being "highly nervous" about your intake appointment is perhaps one of the biggest mistakes you can make.  What do you have to be so nervous about?  The whole idea behind the intake appointment is to get a look at your situation and determine what needs to be done to move you forward toward home ownerhsip.  Why would you be nervous about that?

Relax, and concentrate on being as well prepared as possible for the appointment.  You should be eager to get the process started!

Tim Trumble

Online Operations, NACA

ttrumble@naca.com

[Anonymous]

Thank you for your response. I guess the nervousness steams from me doing this by myself, and for a long I had a long time battle if I should rent or buy. I decided buying is best since I live in NYC and rent prices out here is getting out of hand. I got approved for a FHA last year, however I didn't know what I was doing so I took the journey on doing more research on what would be best for my future.

Beside my Car loan, I have large of amount of school loan, but this is in deferment until I graduate with my MBA next year. Will this be factored in my debt?

I appreciate your help.

[Anonymous]

Hi pfguerrier,

I sent yoiu a PM.  I am starting the NACA process in Newark and was hoping for a little guidance.  

[radchica]

Tim,

We are going to our workshop next week and gathering info. We have 12 months of rental history for an amount above what we are trying to qualify for. The rent up until this point has been paid by me withdrawing cash over 3 days (my bank wasnt local) and then depositing it into the owner's bank account. Unfortunately, no stubs. If I have a the lease signed at the time of rental, a letter from the landlord, plus statements showing the withdrawl from my bank account, will that work? 

Also, the landlord doesnt accept personal checks, only cash, cashiers check or money order. I now have a local bank,so what is the acceptable payment method for documentation?

[sparkle1908]

Tim (or anyone that knows this answer)... Based on the fact that I didn't want to pay more for mortgage than my current rent payment, I was told by my MC that I would be looking at a home at about the $150K mark...well I have been looking around to see what is out there and I haven't been particularly impressed(yes, I know it's too soon but I want to have an idea of neighborhood, etc)...now I can afford to pay more per month, just didn't want to...my next appt is in Aug..now if I go back and say that I want to pay more, I know I would have to have saved the payment shock on a monthly basis (I was given an affordability sheet so I know what amounts I would need to save)...my question is, would I basically have to restart the process if I say that I want to pay more or will my MC be able to proceed seeing that I have been saving the payment shock for the 3 months?

[Anonymous]

Hello radchica,

Here is what the NACA Home Buyer's Workbook says about proof of rent:

On-time rental payments must be documented for the most recent 12 months. Your Housing Counselor will need documentation verifying that you pay your rent on time. It is best that you pay your rent by check or, if the landlord does not accept personal checks, you must pay rent by a cashier’s check or money order, which can be tracked. The accurate withdrawal for rent should be identified in your bank  statements. Your current landlord can verify payments by completing a NACA Rental Verification Form  (obtained from NACA), or you can provide NACA with a copy of the lease agreement and twelve months of cancelled checks or other documentation such as copies of the money orders with a matching bank statement withdrawal. Note that twelve months of canceled checks must also be provided if you are related to your landlord or your goal is to purchase the house you live in. You must also be prepared to provide an explanation, in writing, for any discrepancies between your self-reported residential history and the residential information on your credit report.

The only one who will be able to tell you for sure about your rental history will be your counselor after he/she reviews your documents.  Your landlord will be sent the standard Verification of Rental (VOR) form, but whether you are able to provide adequate documentation in addition to that can only be determined by seeing what you have.

Tim Trumble

Online Operations, NACA

ttrumble@naca.com