Under contract and concerned

[Anonymous]

I've read so many articles with differing opinions that I don't know what to expect. I'm going through Prime Lending and got pre-approved with a score of 358. I have one loan that is of any length and it has one late last June. I have 4 other accounts but they are all 4 to 6 months old. They said they could create trade lines with some other monthly payments I've made but these are not utilities. They are taxes, a hospital bill, and life insurance premiums. I make $130,000 a year and my DTI is less than 10%. Any hope that this may happen? My mortgage company knew all of this going in. Also, my mother owed me $8,000 from a personal loan that I payed off and I deposited that in the last 60 days and I've heard that is a red flag. I used it to pay tuition and I am sure I can get the checks from the bank to prove I paid the loan. I'm very overwhelmed and nervous.

[oldman425]

Great question for your loan officer.  Your Mom and you might have to write a letter explaining about the money.

[Anonymous]

Credit score is 658, not 358. Sorry!

[StartingOver10]

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@Anonymous wrote:
Credit score is 658, not 358. Sorry!

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^^Yes! Big difference. I was wondering how in the world.....

[kc0039]

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@Anonymous wrote:
Credit score is 658, not 358. Sorry!

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If it was 358, how much would the interest rate be? 18%?

[Anonymous]

It's not 358, it's 658. I'm sorry! Typo!!!

[H-B]

If you can prove with paper trail  $8000 money going out from your account to your Mom account or some kind of paper Trail  then that's fine. Did your lender start working on trade line if not they should?

[Anonymous]

Would I need to show the full amount or a couple of payments (cancelled checks) applied to the loan? It was over a 3 year span and paid off last fall. She is aware but we don't meet until Monday.

[ShanetheMortgageMan]

I find it a little odd you got pre-approved but the loan officer didn't address these concerns.  A pre-approval is when an underwriter has reviewed your file and confirmed your credit, employment, income and assets are all acceptable.  It might be that only the loan officer reviewed your file, and not an underwriter, which is considered a pre-qualification.

It sounds like the loan officer was referring to using non-traditional credit to build up your credit profile.  If you have a credit score and received an automated underwriting approval, non-traditional credit history shouldn't be required.  However, if you didn't get an automated underwriting approval then you may need at least 3 trade lines with a 12 month history.  Items such as rental history, telephone service, internet service, utlities (water, electricity, gas), insurance premiums not payroll deducted, payment to child care providers made to businesses that provide such services, school tuition, rent-to-own, payment of medical bills not covered by insurance, a documented 12-month history of savings evidenced by regular deposits resulting in an increased balance to the account that were made at least quarterly, were not payroll deducted, and caused no insufficient funds (NSF) checks, a personal loan from an individual with repayment terms in writing and supported by canceled checks to document the payments, and a documented 12-month history of payments by you on an account for which you are an authorized user can all be used as non-traditional credit.

As far as the $8k deposit, it can be treated either as a repayment of a personal loan (meaning it'd be considered as your own funds) or as a gift.  To treat it has a repayment of a personal loan you'd need to document you giving your mom all of the $8k, the loan agreement (even if it was only verbal at the time, then this can be created now and backdated), and her repaying you all $8k.  If those items can't be documented, then underwriting will likely consider it as a gift instead, requiring your mom to complete a gift letter.  You shoudln't have to document where you ended up spending the $8k on.

[Anonymous]

I apologize! This is all so new to me. I was pre-qualified/not pre-approved.