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So some of you have been following what I have been going through having to buy a home on short notice and dealing with satisfying underwriting conditions from halfway accross the world.
Apparently since I filed a large insurance claim for my entire condo flooding last month (almost 110k for ruined belongings and being moved out into storage and staying in hotel) my insurance is going to be triple what was submited with the loan. This in turn is going to impact my DTI which I though was going to be no problem.
Rewind though to when I was speaking with the LO and I had only a 21% DTI according to her well that is with my overseas markup on my salary (worded as duty bonus on my check stubs) and my overtime pay. The underwriter is coming back and saying now that they can only use my base salary and not the overtime or the overseas mark up since it is a bonus. I have been at the same job for 3 years now. Same industry for 14. Degree in my field. And now the UW is saying he will have to get some guidance from his boss since the DTI after he figures everything back in is now 45%. To me this is a load of crap.
The loan officer is frantically trying to shop for another insurance agent to write the home owners in case the underwriter wants to play hardball and just take my base salary as income. The underwriter did say that if the insurance would have remained constant at what they had estimated of 150 per month or there abouts then I would have been ok and they could approve. They tossed out the other scenario of doing FHA and maybe being able to approve the 45% DTI but I am not sure.
I am now halfway across the world with all my stuff in storage. My fiance living with her friend until we can close on the house and have no idea if this is even going to happen. Putting her on the loan is not an option since her credit is shaky and we are still cleaning up her stuff.
I guess yes I am in position to put more money down to offset but I litteraly had 3 bedrooms worth of furniture and electronics ruined as well as a lot of clothing and other items. I think what is so hard to fathom is how someone with a great job can and great payment history can get screwed over so bad by a lender that is hanging on some technicalities when they know good and well that the person has the assets to pay cash for the home if nescessary and could also easily make the payment. Hell even with the insurance going up its exactly what we have paid for almost 3 years to lease the condo we are in!!!
Any suggestions from anyone on how I should proceed would be greatly appreciated. I think its time to try and punt and find a new lender right now since the house is done just don't know how quick I can steam roll a lender into closing?
Even with 45% DTI should still go through, is this an FHA loan or Conventional?
Find another lender if that's the case, there are definitely lenders that will do much more than 41%. And if you can qualify for Conventional, defintey go that route, especially if you can put 20% down. Why would you want to pay PMI for 5 years?
I see that you've been with your employer for three years. Have you received the OT and bonuses for 2 of those three years? In the past, you only needed a two year history of receiving bonus and OT to include as income. Not sure if that's changed.
You mentioned having plenty of reserves, which is a compensating factor for higher DTIs. Why is the UW not willing to use that as compensating factor?
@Sunshine85 wrote:I see that you've been with your employer for three years. Have you received the OT and bonuses for 2 of those three years? In the past, you only needed a two year history of receiving bonus and OT to include as income. Not sure if that's changed.
You mentioned having plenty of reserves, which is a compensating factor for higher DTIs. Why is the UW not willing to use that as compensating factor?
I have had overtime and overseas bonuses over the past 2 1/2 years as well as been paid generous per diem which there is always a substantial excess. I can completely understand them not accepting the per diem income as income. However the gross salary is not decreasing and has only increased year over year.
As to why the underwriter is not willing to use that I dont know also why the loan officer and processor had me figured at less than 20% DTI with all my income then the underwriter wants to play these games. With the only response of that I need to either put more money down or find a different home owners insurance company because he doesn't want to include the overtime and bonuses and its his discretion. Luckily I stirred up enough with the loan officer the underwriter's manager is being brought into the situation to provide guidance but I am still in the dark.
The bad part is I have already executed a power of attorney with that lender for my mother to perform closing for me since I dont arrive back to the states till 10 days after we are to close. So the only thing I can do if this falls through with that lender is try and find another lender while I am 13 hours ahead of Houston time (loose sleep) and hope to get things done quickly so my fiance and I can move in while I am home for only 17 days before I have to go back overseas for work. Oh and the best part stay in a hotel for that time since she has been staying at her best friends house until the house gets done.
If you're using the builder's preferred lender, I would raise a stink with the builder as well. Let them know their preferred lender is being completely ridiculous. I would bet that if the lender was to hear from the builder as well, they'd be forced to be more reasonable. From what you've written, there's no reason that the OT and bonus income should be excluded.
Good luck, and please keep us updated on the outcome.