Waiting for Clear to Close

Anonymous · ‎11-19-2015

Hello,

So I am less than 30 days out from the anticipated close date on my new construction home in the DFW area. It has been a rollcoaster ride up to now. I signed a contract on the house in July and had the file fully underwritten by the builders preferred lender and there were no issues. I am currently setting on a TU 712 EX 677 and EQ 671 with a 12% front-end DTI ratio and a 46% percent backend DTI ratio. I make $94k a year in a IT that I have been at it since 2001. We are doing a FHA with a locked in 3.75% APR that is good till Jan 25th. In the September after talking to my LO, we discuss my 2 judgements (from Oct 2008 and Aug 2009) on my EQ file that both reported as satisfied, my LO mentioned that we would need letters showing that judgements were settled.. turns out they were not. I let me LO know about them as soon as I found out and that I would get them settled. I finally got the settlement letters for them and 1 dropped off my file in October. I also started another underwriting cycle on my loan this week and send my 30 days of payrolls statements, 60 days of bank statements, my LOE for 5 inquires on my file. I am pretty much pacing the floor waiting for those 3 little words and hoping this will sail through as before.

My only hiccup is I am supposed to have 12.5K in funds to close (down payment+closing costs) and right now I have about 10.5K and will be able to get another 1000 put in before we close. My wife is also going to work the holidays to get some extra money to help with the rest. So I am biting my fingernails and praying I don't end up with a denial. My LO is not worried and says that they have financed up to 50% percent back-end and that my file looks fine. I am not as sure as him and being as I have put up earnest money ($2500) plus upgrades (another $2200) and I invested to make this work. As I have not owned a home before this, I don't have equity for a huge down payment and with a 1 year old it has been tough saving.

Also I am trying to push the closing to the first week in January for 2 reasons, 1. I am committed to my rental lease till February and if I close in December, I will end up with 2 payments in February. 2. Is I can have a extra month to come up with the other 1000 I need for closing.

Does anyone have any advice, any LO, Processors or Underwriters that could weigh in would be helpful too.

StartingOver10 · ‎11-20-2015

Sounds like you have it handled. The only comment I can mention is the judgments need to have recorded Satisfactions (recorded in the county) so they don't come back to bite you at some future date. You may have done this already, but I only mention it because you referred to the settlements as "letters" and not recorded Satisfaction. IME I have seen CA's fail to record these satisfactions which is a problem for you (not for them).

So double check the public records section for your county to make sure they are showing as Satisfied judgments.

Other than that, you look like you have everything under control.

Anonymous · ‎11-20-2015

Thanks Starting.

They are from the creditor (both judgements had the same CA) to me and they sent copies to the court clerk in the county where they were entered. They also sent copies to the Registar of Titles with a release of lien to remove the personal lien. The court clerk said she updated the case records to satisfied. My concern and worry is with the underwriter and that everything will go smoothly, I did have 5 inquires and my wife who is not on the loan did too (only 3). Other concern is the lack of closing funds on the bank statements i sent which is current $2000 shy of the amount needed at closing.

Now I could bump the rate up a quarter of a point to have less funds needed at closing but with my backend DTI at 46% that does not give me much wiggle room there. Hence why wanted it pushed to January so things would be more in line plus not having to deal with 2 payments in Febraury (Current rent and New Mortgage)

StartingOver10 · ‎11-20-2015

One more thing: you will miss the Homestead Exemption for 2016 if you don't own the property as of Jan 1 2016. Here in my area (FL) it is a huge savings. I don't know if it is the same for your area. Research it.

Here is what I am talking about for your area: http://www.dallascad.org/forms/HS_State_Form_50-114_08-2011.pdf

Anonymous · ‎11-24-2015

@StartingOver10 wrote:
One more thing: you will miss the Homestead Exemption for 2016 if you don't own the property as of Jan 1 2016. Here in my area (FL) it is a huge savings. I don't know if it is the same for your area. Research it.

Here is what I am talking about for your area: http://www.dallascad.org/forms/HS_State_Form_50-114_08-2011.pdf

I will own a property outside of the city limits in Ellis County and the expect property tax is esimated at $4300 a year. So this would be more savings on top of that?

StartingOver10 · ‎11-24-2015

I don't know if it will be additional savings. In my area we can only homestead our primary residence. Check with your property appraisers office, should be something on line to see if you are restricted to only your primary residence or not. Each area is different.

DallasLoanGuy · ‎12-01-2015

you cant close until you have the 12.5K

so the power to push it back is in your hands.

however, builders dont like to sit on properties.... they like to broom it clean and go straight to closing. every day csts them money as they are financing the construction.

not too worried about you getting approved. looks ok to me.

i am concerned about the builder's attitude when they find out you wont have the cash to close until january.

Retired Lender

Anonymous · ‎12-01-2015

@DallasLoanGuy wrote:
you cant close until you have the 12.5K
so the power to push it back is in your hands.

however, builders dont like to sit on properties.... they like to broom it clean and go straight to closing. every day csts them money as they are financing the construction.

not too worried about you getting approved. looks ok to me.
i am concerned about the builder's attitude when they find out you wont have the cash to close until january.

Thanks for responding DLG.

I heard back from the processor today that my credit and income are approved but they are still waiting on the appraisal and the underwriter has a few more things to review. I also will probably have the 12.5K in December. Worse case if I have to, I could have them bump the rate up a quarter of a point to have less needed at closing as a last resort but I don't want to push my DTI up anymore than it already is. What gives me pause at this point to staring down the barrell of a $1500 dollar rent payment and $2300 mortgage payment at the same time in Feburary if we close in December. The builders GC is trying to stall where he can but hopefully it can be stalled to January as I hope.

Anonymous · ‎12-02-2015

Just a quick update.

I got an email from the loan processor that everything is clear in underwriting and we are just waiting on the apprasial to be recieved and reviewed. Does this mean I am CTC pending the appraisal?

Anonymous · ‎12-08-2015

So I got an update from the processor that everything is clear with no conditions, just waiting on appraisal. Woohoo!

I also was told on Sunday when we walked thru the house, which is not in apprasiable condition, that we are not going to make the December 17th close date. Double-Cheer!! So at the moment, I am up in the air on the close date. (Cmon January), so please cross your fingers for me that the closing gets pushed to January.

Getting closer now, can't wait to finally close on my home. Been a long road.