i made the title a bit dramatic
we thought that the process was almost complete (first time buyers)
so we assumed that everything gonna be done by the 1st of next month and we moved out of our rental house and put everything in a storage
now we are staying at my wifes sister house expecting to have our house in 2 weeks
today the wells fargo mortgage consultant told us that underwriter denied out loan
we have a 5 month old kid and no space to set up a crib so he is growing out of the lil basket he slept in
my wife has savings and enough to put a 20% downpayment on a 250k loan and good credit over 750
i have no savings and very good credit also over 750 i was unemployed for last year and a half so i had no proof of income.
she had to get a loan with her sister that just bought a house in cash and paid it off
i have no savings because i wasnt planning to buy a house now and she just suddenly decided she wants a house so i wasnt really prepared.
as much as i want her to learn from this mistake i rather get this over with.
the consultant said its ok and that we shouldnt have a problem to get approved.
now the underwriter said that my wife doesnt make enough money and her sister doesnt live with her...
it seems like he is wasting our time
she already paid the earnest money and independent inspection and the inspection by the bank.
i dont really know what we can do in this situation since we are in a hurry to move in a house.
Sometimes you can overcome some of these obstacles with a different type of loan. Although many people use FHA because the downpayment is low, there are other underwriting benefits to an FHA loan. One of the main benefits of an FHA loan is that you can have a non-occupant co-borrower AND the loan is assumable with qualifying. Although you have 20% to put down, it seems like your wife needs someone else on the loan to boost her income to qualify for the loan. This way you can close with the FHA loan and when your wife's income is large enough to support the house on her own or with you, then you both can 'assume' the existing loan. Talk to your LO about changing the type of loan for which you are applying. Also, it would be a good idea to make application with a mortgage broker/mortgage banker rather than Wells Fargo. You have a much better chance of getting your loan completed.
I am in a similar situation sans the child. I was preapproved by wells and it all looked good, then whamed! denied. The u/w didnt feel comfortable approving the loan. So now i am with two different brokers who are looking at it. I'll miss my original closing date. But hoping it will be completed by the 2nd week of October. I would say try a broker as they may have less overlays than big banks have.
Agree with the others. I would ditch Wells and look for a broker/banker and go FHA.
From personal experience dealing with Wells Fargo right now, listen to them and ditch them and use a broker. They'll be straight up if you find a good one. From experience and from reading on here, Wells Fargo LO's are just a bunch of application takers now and the only one in the office that even touches paperwork is the processor that just gathers it and hands it to underwriting. Their the ones that basically do everything!
In my opinion, unless you have big bank experience like a previous home loan or a super high line of credit with the them then you should always go with a mortgage broker and then decide rather or not to go fha. Another big no no is having the debt to income ratio out of there lending parameters. Income means money you make. Do you make enough to pay for what you qualify for? Some people get pre-qualified for more than they can actually afford... without even thiking about the taxes, FEES,interest and did I say fees. Goodluck to yall.
You don't say specifically, but do you have a contract on a house? I wonder if you were "pre-qualified" or "pre-approved", there's a difference.
Do you have a Buyer's Broker? I would talk about this with your Buyer's Broker, or if not with the seller's realtor for recommendations for a mortgage broker.
If we go with a broker how can she get the money back because she already paid close to 7k for the inspecrions and earnest money
And also the bank appraised the house 2000 dollars less than owners asking price.
Ive been renting since 2005 and have a good history
Mortgage is gonna be 1200 a month same as we paid for our rental house for a year.
Plus she took a 4 month break from worh due to prefnancy and her income ia gonna be even lower this year.
Earnest Money is paid to the Realtor / Real Estate Broker and held in escrow. So using a different Mortgage Broker shouldn't affect that.
Inspections by licensed inspectors should be reusable.
If the appraisal is lower you have to find another $2000.00 for your downpayment or renegotiate the sale. Typically a seller would reduce their price. The other thing is you probably can't "reuse" an appraisal, a new lender will order a new appraisal.
Any money paid to Wells Fargo based on their representation of "pre-approval" should be refunded.