topic Re: Home Buyers Club - DR Horton in Mortgage Loans

Home Buyers Club - DR Horton

Anonymous — Fri, 30 Sep 2016 19:02:49 GMT

In late August I signed a contract on a new construction home from DR Horton and enrolled in their "Home Buyer's Club" for their customers with credit scores that need improving. I started with a score of about 550 - 580 and my credit counselor called me yesterday to confirm that it was now 644!

I'm doing an ~~FHA~~ USDA loan so I needed that 640. I had to pay down some debts and remove myself as an authorized user on some credit cards.

My credit counselor wasn't very detailed, all he said was that he'd forward along this information to the DHI Mortgage loan officer. Anyone who's gone through this already or know more about it than I do got any insight as to what my next steps are?

This is my first home purchase ever.

Re: Home Buyers Club - DR Horton

CaliforniaLoaner — Fri, 30 Sep 2016 18:59:51 GMT

Hi Summerday,

Congrats on the improvement! I would say the first thing you should do is make sure that an FHA loan is right for you. A lot of times lenders that work with builders don't have very many product offerings when it comes to loans. Not to say FHA won't be what ends up fitting best, but it's usually the last thing I look to when qualifying a client. The main reason I say this - is the 1.75% funding fee that FHA charges at closing. That really cuts into any savings you might get for using the in-house lender. How much are you putting down?

Also, where are you purchasing with D.R. Horton?...when is the projected close date? Generally these will run behind schedule about this time of year.

Re: Home Buyers Club - DR Horton

Anonymous — Fri, 30 Sep 2016 19:06:39 GMT

I'm sorry it's a USDA loan not an FHA. I can't believe I made a mistake typing that lol. I got the builder to agree to pay $8K in "closing costs".

I am purchasing in Fresno, TX (a suburb of Houston.) Projected close date has not really been disclosed to me? They did say they expect the home to be completed by Dec/Jan. As far as the house goes they just put in the forms and haven't even poured the foundation yet.

Re: Home Buyers Club - DR Horton

StartingOver10 — Fri, 30 Sep 2016 21:16:15 GMT

Make sure you read the contract thoroughly especially the portion about closing costs. It is common for builders to push over normal seller closing costs to the buyer side in the contract, as a result, the $8k may not be nearly enough to cover the entire closing costs. Don't rely on the lender to point this out to you. Read it for yourself in the contract so you use this construction time wisely to build up savings

Re: Home Buyers Club - DR Horton

CaliforniaLoaner — Fri, 30 Sep 2016 21:23:53 GMT

Gotcha, then yes, you should be in really good shape. Whatever you do, just make sure you don't use any of your credit cards. If you do, pay them off right away. Your credit is only good for 120 days, so it will be pulled again at the end and could mess up your approval.

I'm sure they're waiting until next week to get you going - the USDA fees drop dramatically for applications taken on or after October 1st, 2016.

Agree with the above statement - definitely make sure you read the contract. They can be a little tricky . Congrats on your new home!

Re: Home Buyers Club - DR Horton

Anonymous — Thu, 13 Oct 2016 19:31:54 GMT

I just got horrible news.

The loan officer that was originally working this deal quit a few weeks back and I had no idea. The new loan officer never got in touch with me so I reached out to them myself (once I discovered what had happened) and the moment I got him on the phone he says "Oh yes I'll push the loan along now, let me send you over some papers to sign electronically." As I look through the papers I see that everything is labeled and structured as an FHA loan. I call back thinking this was just a mistake because I've been going for a USDA loan from the beginning. This is the ONLY reason we chose this area, this subdivision, this builder, this house. Everyone from my realtor, the sales person @ DR Horton, to my original loan officer KNEW this.

Well the new loan officer says that from what he understood (never spoke to me) this was an FHA loan from the start. This is wrong. But at this point what I say does not matter because according to the loan officer the HBC (HOME BUYER'S CLUB) was also working with that information and graduated me with a credit score of 636 which is good enough for FHA but not USDA. He also says that the DTI (debt to income) ratio is not where it needs to be and with a manual underwrite, which is what it would need based on my credit score, this deal would never go through with DHI. But he said I am more than welcome to shop around because another lender might be able to pull it off.

I asked for hard numbers after restructuring the deal as USDA and not an FHA (to get rid of the higher interest rate and mortgage insurance premium) so I can see and know just how far off the mark I am when it comes to DTI but none was given to me. Just vague words and fluff. I contacted a different mortgage lender and they seem more optimistic but he was also realistic in saying that I do not want to give you false hope, but this is no way a crapshoot either. I'm working with very small windows. My credit was increased in a very short amount of time. I have no debts to speak of so no more leverage to really work with to increase my score. I have 1 credit account from conns w/ a balance of 1100 making $91 payment a month and a $300 credit card with a 0 balance since the end of September.

The house had an ETA of a January completion, pre-drywall inspection can be done at the end of next week though.

What would you do??? Looking for opinions, guidance, suggestions, anything.

Re: Home Buyers Club - DR Horton

StartingOver10 — Thu, 13 Oct 2016 19:41:28 GMT

I would seek out another lender. If you are looking to go USDA and the builder's lender can't do USDA (for you) then make sure you get that in writing so you can show why you selected another lender. The fact that they didn't give you your information (costs and DTI) in writing is a red flag to me. You are the one that has to pay the loan so make sure you are getting the loan you want and the loan for which you qualify.

If you are using a different lender, make sure the seller's contribution is still available to you.

Re: Home Buyers Club - DR Horton

DallasLoanGuy — Thu, 13 Oct 2016 19:46:08 GMT

did they tell you what your dti was?

Re: Home Buyers Club - DR Horton

Anonymous — Thu, 13 Oct 2016 19:48:00 GMT

I hadn't even thought of that, I will try to get this in writing. I've just sent off an email to the loan officer.

My initial reaction is to pursue this loan to the end with a different lender until I am ultimately denied or approved. If I am denied at least then I will know and I can try again at a future date. Should I still pay for a pre-drywall and final inspection like I had been planning?

Re: Home Buyers Club - DR Horton

Anonymous — Fri, 14 Oct 2016 21:18:12 GMT

I know you are in Houston area, but talk to Norma (edited) at DHI. She is the resident USDA specialist at DHI in Texas. I would give it one more shot with them, as their incentives can be worth it, and from my experience with a builders' lender, they are much more invested in getting you closed.

Your realtor should be foaming at the mouth at these guys. Leverage your realtor.

Re: Home Buyers Club - DR Horton

StartingOver10 — Thu, 13 Oct 2016 19:52:07 GMT

@Anonymous wrote:
I hadn't even thought of that, I will try to get this in writing. I've just sent off an email to the loan officer.

My initial reaction is to pursue this loan to the end with a different lender until I am ultimately denied or approved. If I am denied at least then I will know and I can try again at a future date. Should I still pay for a pre-drywall and final inspection like I had been planning?

Are you having a 3rd party inspection? Is that why you are having to pay for it? Or is this an inspection with the builder?

Re: Home Buyers Club - DR Horton

Anonymous — Thu, 13 Oct 2016 20:37:48 GMT

Yes a 3rd party inspection. Sorry should've been more clear.

Re: Home Buyers Club - DR Horton

StartingOver10 — Thu, 13 Oct 2016 20:41:51 GMT

It's up to you if you want to have that inspection done. If I were in your shoes, I would go ahead and have the inspection done with the idea that you will get approved for your mortgage. Naturally, this is entirely up to you,

Re: Home Buyers Club - DR Horton

Anonymous — Thu, 13 Oct 2016 21:01:01 GMT

Have you worked with Norma yourself?

Re: Home Buyers Club - DR Horton

Anonymous — Fri, 14 Oct 2016 06:04:26 GMT

I did and she was super knowledgeable. I didn't qualify for USDA and she reviewed my file and was very honest with me. She knew the regulations backwards and forwards.