topic Letter explaining comfort of payments in Mortgage Loans

Letter explaining comfort of payments

Anonymous — Wed, 11 Dec 2013 23:08:55 GMT

I am in the process of getting our mortgage loan and the processor has asked for my husband and I to write a letter explaining that we are comfortable making the estimated mortgage payments. Is this normal? What exactly should I be saying?

Re: Letter explaining comfort of payments

basballguy — Wed, 11 Dec 2013 23:17:08 GMT

@Anonymous wrote:
I am in the process of getting our mortgage loan and the processor has asked for my husband and I to write a letter explaining that we are comfortable making the estimated mortgage payments. Is this normal? What exactly should I be saying?

You should say you're not comfortable with it and give as many reasons as possible for why it should be lower.

Re: Letter explaining comfort of payments

Anonymous — Wed, 11 Dec 2013 23:21:47 GMT

@basballguy wrote:

You should say you're not comfortable with it and give as many reasons as possible for why it should be lower.

I am pretty sure that if I say that, my loan won't go through...

Re: Letter explaining comfort of payments

basballguy — Wed, 11 Dec 2013 23:25:44 GMT

@Anonymous wrote:
@basballguy wrote:

You should say you're not comfortable with it and give as many reasons as possible for why it should be lower.
I am pretty sure that if I say that, my loan won't go through...

I would hope you wouldn't

Perhaps they're asking you this in lieu of having to require payment shock? Seems silly to me but I guess nothing is really silly these days.

Re: Letter explaining comfort of payments

p- — Thu, 12 Dec 2013 00:32:53 GMT

@Anonymous wrote:
I am in the process of getting our mortgage loan and the processor has asked for my husband and I to write a letter explaining that we are comfortable making the estimated mortgage payments. Is this normal? What exactly should I be saying?

Is your new payment going to be considerably larger than your current rent? If not, I would point out that you have been making payments of a similar amount for x number of months.

If it is larger, then you should point out that you have been able to save toward down payment each month an amount greater than the difference between your rent and your new mortgage payment.

If it's larger, and you haven't had that amount of money to save each month, then how do you plan to make the payment? I men, tell us honestly... if it's larger what will you cut to make sure you can make the larger payment?

Re: Letter explaining comfort of payments

Anonymous — Thu, 12 Dec 2013 00:56:16 GMT

@p- wrote:
@Anonymous wrote:
I am in the process of getting our mortgage loan and the processor has asked for my husband and I to write a letter explaining that we are comfortable making the estimated mortgage payments. Is this normal? What exactly should I be saying?

Is your new payment going to be considerably larger than your current rent? If not, I would point out that you have been making payments of a similar amount for x number of months.

If it is larger, then you should point out that you have been able to save toward down payment each month an amount greater than the difference between your rent and your new mortgage payment.

If it's larger, and you haven't had that amount of money to save each month, then how do you plan to make the payment? I men, tell us honestly... if it's larger what will you cut to make sure you can make the larger payment?

Well, my current rent is 0 and has been for the last several months, so I guess that would fall into the category of significantly larger payment. We have been using an amount of money greater than our future mortgage payment to pay off nearly all our outstanding debts and to save for downpayment and closing costs. We don't plan to have to cut anything, honestly. What we were spending before of debt payments, we will now be putting toward our house payment. After closing costs and downpayment, we will still have reserves of 3x the mortgage amount in cash, plus less liquid reserves, such as 401k plans and IRA accounts and paid off vehicles. We are using a 5% down conventional loan and have mid credit scores of 792 and 805 from the lender pull earlier this month.

Re: Letter explaining comfort of payments

StartingOver10 — Thu, 12 Dec 2013 01:13:36 GMT

Since you have only been paying rent of zero for the past several months, was the rent you were paying prior to that larger or smaller than the proposed mortgage payment. Yes, they are looking to make sure you don't experience payment shock.

Re: Letter explaining comfort of payments

Anonymous — Thu, 12 Dec 2013 01:19:21 GMT

The rent we paid prior was smaller.

Re: Letter explaining comfort of payments

DallasLoanGuy — Thu, 12 Dec 2013 03:00:03 GMT

@Anonymous wrote:
@p- wrote:
@Anonymous wrote:
I am in the process of getting our mortgage loan and the processor has asked for my husband and I to write a letter explaining that we are comfortable making the estimated mortgage payments. Is this normal? What exactly should I be saying?

Is your new payment going to be considerably larger than your current rent? If not, I would point out that you have been making payments of a similar amount for x number of months.

If it is larger, then you should point out that you have been able to save toward down payment each month an amount greater than the difference between your rent and your new mortgage payment.

If it's larger, and you haven't had that amount of money to save each month, then how do you plan to make the payment? I men, tell us honestly... if it's larger what will you cut to make sure you can make the larger payment?
Well, my current rent is 0 and has been for the last several months address that. explain what you did with the money that would otherwise go to rent. , so I guess that would fall into the category of significantly larger payment. not really.... you can argue that the $0 was short term and argue off the old rent payments you made We have been using an amount of money greater than our future mortgage payment to pay off nearly all our outstanding debts and to save for downpayment and closing costs. We don't plan to have to cut anything, honestly. What we were spending before of debt payments, we will now be putting toward our house payment. awesome answer. After closing costs and downpayment, we will still have reserves of 3x the mortgage amount in cash, plus less liquid reserves, such as 401k plans and IRA accounts and paid off vehicles. We are using a 5% down conventional loan and have mid credit scores of 792 and 805 from the lender pull earlier this month.

what was old rent before the zero rent?

what is new mortgage payment?

do fret... this has to be addressed per guidelines. not a deal killer

Re: Letter explaining comfort of payments

Anonymous — Thu, 12 Dec 2013 18:06:37 GMT

We lived in a mobile home that was paid off, but had space rent of $950. We sold that and temporarily had 0 rent due for a period of 2 months. Our new mortgage payment is estimated to be $2350. So I guess I can see why they would think we could have payment shock, as that is a bit of difference in payments.

I wrote up a letter last night explaining what I wrote in my post above, just a little more detailed about why we are used to shelling out this amount each month without problem.

Thank you all for your help and insights. It is reassuring to have input from people who know this procedure so much better than I do.