topic Re: Help/advice in Mortgage Loans

Help/advice

Anonymous — Mon, 04 Apr 2016 20:01:24 GMT

Here is my situation

*Scheduled closing 5/6

3/20 looked at the house
3/21 made offer 115k plus 5k in closing costs
3/22 offer accepted no counter
3/23 contract signed by all parties
3/25 completed full mortgage application and signed all paperwork
3/28 appraisal and inspection done
3/30 appraisal came back 14k over sales price. No repairs needed (home is fairly new, built in 2003)
4/1 went ahead and sent April bank statement to stay ahead of the game

Now here is my problem. I make 18,192 salary and roughly 22,000 in commission per year. I've been in sales 5 yrs but with this particular company 1 yr. The underwriter won't accept my commission as it was different sales. That's fine.

What I'm not understanding is the dti they are getting. Their company advertises taking dti up to 50%. I'm only looking to finance 102k as I'm putting 18k down on a 120k loan. Now I do have a car payment of 336 per month and a credit card for 25 but I keep it paid off so it reports zero. My lo told me not to pay my car off in advance of the application since my mid score is 673 and he didn't want it drop below 640. He said we could always offer to pay it off if the underwriter didn't want to use my commission and needed me to for dti. I also can put more money down if we still were cutting it close on dti.

He says the underwriter has my dti at 51% right now if we pay the car off. So I say OK well I'll put more down the get it to 50% or less, and he gets quiet and says I need to report more than my 2 trade lines as well. Now if I had more trade lines my dti would be higher right? Also I had a student loan I paid off in December that reported for several years and should be usable as its still on my report.

All that aside with the car paid, off taxes of 1672 per year, insurance quote of 1080 per year, and my 1516 they are willing to count as monthly income I'm not getting a dti as being to high. Even when I add pmi if I put 20k down my dti is fine. Can some one else tell me what they get for my dti please?

Also not that it matters, clearly, but I got approved eligible in aus also. 55k in savings and non applying spouse income as a good compensating factor.

Re: Help/advice

Anonymous — Mon, 04 Apr 2016 20:11:35 GMT

Should I go ahead and submit my stuff to another lender with my car paid off? I don't want to push my closing back lose money on my inspection and earnest deposit. If I get my stuff to someone else now they'd have a month to get me done.

My lo says they haven't denied me yet but I dont trust his judgement anymore as he's the one that ran my numbers with and without the car and with and without commission and told me I was fine everytime.

Re: Help/advice

Anonymous — Mon, 04 Apr 2016 20:20:57 GMT

I took a look at your dti and from what you said in your post I am getting a dti of 51.68% now that should be fine for a backend ratio but it probably is a problem since that is your front end ratio as well. How much different are the products you are selling now than with the company you with before? I assume that's why the underwriter doesn't want to count your commissions. Is therea resaon you can't have your husband on the loan?

Re: Help/advice

Anonymous — Mon, 04 Apr 2016 20:33:56 GMT

From insurance sales to car sales.

My husband can't because when he files taxes separately from mine of course his dti is out of this world because he doesn't show much income and has a few tradelines.

They never mentioned front end dti in any of their guidelines or now just back end as being 51. This wouldn't be so frustrating if they didn't let you get half through this process then do this after emotions are invested and money is spent. I can put up to 25k-30k down along with paying off the car to fix dti and they know this.

My lo told me 18k was perfect when he did my ratios so I guess he's the idiot that got me into this mess.

Re: Help/advice

Anonymous — Mon, 04 Apr 2016 20:34:51 GMT

Oh interest rate is locked at 3.75 BTW . Not sure if that matters.

Re: Help/advice

Anonymous — Mon, 04 Apr 2016 20:44:21 GMT

I see. That's why I try to be as up front as possible in the beginning so people don't get their hopes up and then something happens. I am trying to think of a way to help you all out. Does your husband show any income or does he always claim a loss? Does he have any depreciation or depletion on his tax returns?

Re: Help/advice

Anonymous — Mon, 04 Apr 2016 21:11:01 GMT

Always shows a loss

Re: Help/advice

Anonymous — Mon, 04 Apr 2016 21:19:36 GMT

Does he have any depreciation or depletion because that can be added back in?

Re: Help/advice

Anonymous — Mon, 04 Apr 2016 22:22:41 GMT

I'm not sure honestly. There are other issues with his income to though. He is mostly paid in cash (babershop) so then verifying the income shown with losses added back in is also near imposdinle. Basically he is not an option to go the loan and we I was up front about that

Re: Help/advice

Anonymous — Tue, 05 Apr 2016 16:21:28 GMT

UPDATE: I've got a broker working on it. He has some lenders that don't have dti overlays for fha. Now I feel less like I'm going to throw up. Still nervous....

Re: Help/advice

Anonymous — Tue, 05 Apr 2016 20:05:19 GMT

Good luck. I feel you with the "about to throw up" level of nerves & anxiety. Their working on my property appraisal now. Then, off to underwriting.

Re: Help/advice

Anonymous — Tue, 05 Apr 2016 21:52:16 GMT

I think its so stressful because preapproval really doesn't mean anything. A LO is not an underwriter so there's never complete certainty. Good luck to you as well. Hopefully we both close early

Re: Help/advice

StartingOver10 — Tue, 05 Apr 2016 22:09:14 GMT

@Anonymous wrote:
I think its so stressful because preapproval really doesn't mean anything. A LO is not an underwriter so there's never complete certainty. Good luck to you as well. Hopefully we both close early

This is true ^^^^ However, a good LO knows the guidelines and can reach the u/w if there is a question they don't know. A good LO prepares the loan application appropriately, along with the processor, so that the u/w can give approval right away, the first time with few conditions to be satisfied. (A few conditions are normal). It is much less stressful if the LO is working with you with full knowledge of the program guidelines than it is working with someone that has no idea. I am speaking here of licensed mortgage loan originators. Not the people at big box banks.

[Big box bank LO's don't have the luxury of knowing the guidelines because most aren't trained LO's anymore (they don't have to be) from what I have seen over the last 7 to 10 years. I would be surprised if they even have any direct communication with the u/w at all.]

Re: Help/advice

Sassy_Taurus — Wed, 06 Apr 2016 03:21:16 GMT

Good luck to you. I totally know what you mean when you say that you feel like throwing up. I'm also on my 2nd Lender currently in UW. Hope to have my approval back Friday. They're waiting on me to submit current bank activity showing all funds needed for closing. That will not be available until Friday.