topic Re: (Hopefully) My Journey to Homeownership in Mortgage Loans

(Hopefully) My Journey to Homeownership (new: 10/23)

thankfulheart — Tue, 23 Oct 2012 08:36:21 GMT

I say "hopefully" because there are some "unique" pieces to my situation that we are trying to work around. Long story short and drama-free, I moved myself and my kids 1,000 miles away from my marital home a few years back for an internship that became a real job. I'm tired of paying a boatload of rent and utilities for where I am living and decided to try for a USDA Guaranteed loan September 2011 (when I foolishly thought my scores were in the low-600s). I had a wake-up call at 568 and 586, discovered MyFICO and started to work on my credit.

I was able to get a bunch of junk off through GW letters and some help from HIPPO minus the PO, plus an AA. In the middle of the credit work, my EQ score went to around 638, so I felt safe to start looking at builders. I found the houseplans that were perfect for us in the right neighborhood, plunked down $500 deposit, and signed on the dotted line in March 2012. Continued hammering away until the only stuff left is consequences of poor decisions and I have to live with it. Happily, my credit scores are now 715, 701, and 682, plenty good for USDA Guaranteed.

This is where it gets hairy. My DTI ratios are fine unless everything goes against me in UW. I'm on a mortgage on a marital home which was given to "ex" in a separation agreement. We are not divorcing. I can only prove 4 months of payments from his personal account, they are asking for 12, only, we didn't KNOW it had to be 12 months to be excluded, besides, we only officially separated in December 2011. I also receive child support in the separation agreement, but since it is not a divorce, not sure if they will count it. Finally, I have student loans that are in the process of being consolidated (since early March, what the HECK is taking so long???) and put into the IBR plan which will help the DTI.

I was asked to submit so far:

2 months of bank statements along with explanations for all non-direct deposits over $100

2 months of retirement account

4 weeks of paystubs

Last 2 W-2s

Last 2 tax returns

Driver's License and SS Card

Copies of checks for the child support and promissory note on the marital home

Rental lease and copies of checks for the last year

LOE for why I'm not getting divorced and why I moved

LOE for any late payments on my credit report (2007 and some from early 2011, all over a year past)

Had a chat with the mortgage person today and she finished up my file as much as she could without the stinkin' student loan reporting correctly. That's the big piece we are waiting for. She is going to talk to the UW about the marital home mortgage and the child support to see what, if anything, can be done there. She did say we could NOT do a "settlement at closing" on the marital home which was something I was hoping for. I have $5K currently tied up in earnest money on the new house and since I'm doing USDA, will get all of it back, so could easily pay off the other mortgage with it if I could do it that way.

So I continue to wait...

Re: (Hopefully) My Journey to Homeownership

johnwantsahouse — Wed, 13 Jun 2012 15:24:01 GMT

May I ask who your lender is?

Re: (Hopefully) My Journey to Homeownership

thankfulheart — Thu, 14 Jun 2012 18:00:22 GMT

It's FBC Mortgage.

So, she sent the builder the "pre-qual now" (whatever that is) and told me the conditional approval will take about 3 weeks. I have no idea what that means or where we are in the process. I like checkboxes and orderly information. I don't think they are used to dealing with people who are as involved (controlling? LOL!) as I like to be. I have a limited window of opportunity to move into the new house this fall and I think we might be cutting it very close. The builder rep keeps telling me that my "timeline looks good", but I'm not so sure at this point. I need ground to break by the middle of July if I'm going to get it done on time.

I went ahead and sent the IBR request to the current student loan lender, even though the loans have an "origination" date of 6/22 (again, whatever that means). I'm hoping I can get that done as it's pretty much the only major hangup right now. I'm trying to convince them that since I've qualified for IBR from one lender, I will qualify for the other and it's just a matter of doing the math. Don't have answers yet around that.

I'm still chapped about the divorce requirement for child support to count as income. It's in a legal, binding agreement. I'm hoping the UW can make it work somehow.

Re: (Hopefully) My Journey to Homeownership

thankfulheart — Fri, 15 Jun 2012 01:47:32 GMT

Just got an email that I was approved through GUS! One step forward, now for the 2 steps back. Apparently, even though I am legally on paper and 1,000 miles separated from my spouse, they need his income to qualify me. He's self-employed. I can get the 2010 tax return, but after that could be dicey. Not sure where it goes from here.

Re: (Hopefully) My Journey to Homeownership

Anonymous — Fri, 15 Jun 2012 03:29:10 GMT

I just went through the whole IBR drama thing too and the best advice I can give on that one is keep a close eye on your accounts with your student loan servicers (if you have more than one and it sounds like you do - I do too). I'm with ACS and Great Lakes... Great Lakes has been a total pain and is still reporting my one loan as "in-school" status - thanks to my graduate school reporting that I'm still enrolled - argh! ACS has been easier to deal with and got all my IBR requests processed within their 7-10 day window. If you're with Nelnet or one of the others, I couldn't say how quickly they will move but I'm betting that it will be similar timing.

The biggest thing is to be sure that your loans are in a status that allows for IBR - either forebearance or repayment (I believe). If they are in-school or grace, they won't process the IBR request. I ended up doing the consolidation to get the majority OUT of grace so I could get the darned IBR payments set up.

I'm sorry to hear that they're requiring you to include your separated-husband's income. I'll be crossing my fingers that it all works out for you!

Re: (Hopefully) My Journey to Homeownership

thankfulheart — Sat, 16 Jun 2012 07:02:29 GMT

As someone who works the vampire shift, not a fan of cryptic emails: "I talked to the UW today. When is a good time to talk?"

Oy. Why can't she just say, "hey, it's good/bad news" and then tell me what it is??? or even just the good or bad news part. I'm a control freak worry wort. I get it, but this has already been a long, difficult journey and my poor stomach can't take much more stress by being uninformed.

Re: (Hopefully) My Journey to Homeownership

thankfulheart — Sun, 17 Jun 2012 10:40:02 GMT

USDA is a no-go for me. They are asking for income documentation from my estranged husband that I simply cannot get (profit/loss statements). He is self-employed and does not keep books like a normal person would which is one of the reasons we are "estranged". Whatever, moving on to FHA. I have the 3.5% downpayment, in fact, it's what the builder required for earnest money. Now I have to find out if they are going to want MORE than that (I wouldn't know why they would, but then again, not very much has made sense in this process).

They are also going to hit me not only with the mortgage on the marital home, but 1/2 of the insurance/taxes on it as well. They are NOT going to include child support as it's only a separation agreeement and not a divorce. Both of these are also impacted by the "12 months of payment" rule. We only filed the separation in December and I didn't know about the 12 month thing then.

I am still waiting to finish up the IBR business on the student loans as that's kind of a biggie for the UW.

She ran it again through automated underwriting and still got an approval which is great news.

So, again, 1 step forward, 2 steps back. I'm bummed about the $5K downpayment as I'd hoped to use that to outfit the kitchen with the appliances I want. Guess I just have to pray for a good Lowe's CL when I apply after closing.

Did some math tonight. My front end DTI is 28.5%. Back end DTI would be right at 50.75%. There just isn't anything more to cut at this point. Adding the 1/2 of the insurance/property taxes is pushing me over. Seems like I should only be held liable for 1/2 the mortgage payment on the marital home. Even so, the FHA mortgage payment is still less than what I pay in rent and is a smaller, energy efficient home which should make up for something, I hope.

Re: (Hopefully) My Journey to Homeownership

Anonymous — Sun, 17 Jun 2012 14:44:24 GMT

Do you have credit cards that would be paid off within 6-10 payments? If so, they can exclude the debt and that would help with DTI. When you get closer to closing, find out what they are estimating for homeowner's insurance on your new home. If you can get a premium well under what they're estimating, that will also help your DTI.

Re: (Hopefully) My Journey to Homeownership

thankfulheart — Mon, 18 Jun 2012 05:49:15 GMT

@Anonymous wrote:
Do you have credit cards that would be paid off within 6-10 payments? If so, they can exclude the debt and that would help with DTI. When you get closer to closing, find out what they are estimating for homeowner's insurance on your new home. If you can get a premium well under what they're estimating, that will also help your DTI.

I have one CC that is showing a $10/mo payment, everything else is paid off. She wants that one to report to maximize score. Insurance is tricky here (I'm in FL) and I understand that she's got that trimmed pretty much as far as it will go.

She told me yesterday that she thinks I'll still be OK since I also have good "compensating factors" and my front end DTI is well within range.

I understand why they are so strict after the bubble burst, but at the same time, it's very frustrating. Right now, all I can do is wait for the student loan to settle into IBR and document that and we can move forward from there.

Re: (Hopefully) My Journey to Homeownership

thankfulheart — Tue, 19 Jun 2012 06:52:25 GMT

My tenacity continues to be challenged.

She talked to the UW today about switching from USDA to FHA and now they can no longer include my promissory note as income. After trimming every possible thing, I am $27 over the max back end the UW would sign off on for FHA. Front end is still well within the ratio.

She said I have 3 options:

Pay off the marital home somehow

Refinance car

Get divorced

I'm going to my CU in the morning to see what, if anything, they can do to help me out.

Re: (Hopefully) My Journey to Homeownership

thankfulheart — Wed, 20 Jun 2012 03:11:44 GMT

What a difference a day makes! Walked into my CU this morning and walked out with a personal loan to pay off the balance of the mortgage on the marital home at the same interest rate, but a longer term, bringing me under the backend ratio! I will also now be able to exclude the tax/insurance on that house since I will no longer be on it. Woo-hoo! AND, using the same inquiry, the CU gave me a CLI on my Visa and lowered my APR!! Double woo-hoo! They had given it to me back when I was still in the high 500s at a $500 CL and they bumped me to $3,000 today. I'm still stunned. My LO is thrilled as is the UW. Said I "did good".

So, it looks like we are still on track for a mid-July ground-breaking and an ontime, late September close. My stomach is much happier today.

Re: (Hopefully) My Journey to Homeownership

dekelley1 — Wed, 20 Jun 2012 06:12:17 GMT

You are a truly embattled warrior!! Great job.

Re: (Hopefully) My Journey to Homeownership

thankfulheart — Sat, 23 Jun 2012 06:16:07 GMT

2 steps forward, NO steps back this time! Got my loan docs, signing them tonight and putting them back in the mail on Monday. It's finally starting to feel real.

The problem student loan consolidated, so now I'm just waiting for them to apply the IBR to it.

I'll go Monday to get/mail the cashier's check to payoff the marital home back in Ohio where I also have an attorney working on filing a quit claim deed to get it off my back once and for all.

Tomorrow, I'll be dropping off the rest of the downpayment at the builder's office.

Re: (Hopefully) My Journey to Homeownership

JusdoNit — Sat, 23 Jun 2012 18:29:32 GMT

Full steam ahead

Re: (Hopefully) My Journey to Homeownership

thankfulheart — Thu, 28 Jun 2012 13:50:39 GMT

Dropped off the check for the last of my downpayment with the builder and signed a change order for FHA rather than the USDA I had orginally planned. They said I am next on the list, so hopefully will be breaking ground in the next few weeks. I still have to have my meeting with the builder to go over the final plans, so I'm impatiently waiting for that.

Paid off the mortgage on the marital home. Feels very strange emotionally. Don't quite know how to describe all of that. That home was where my children were born. I designed the kitchen addition from the ground up and helped build it. My home office there was perfect. It's hard to let that go. I'm still waiting on the quit claim deed that my attorney is drawing up so I can finish getting my name off of it. I did send over the payoff paperwork and such to the mortgage folks. She said she would be getting a credit supplement for that for the UW.

STILL wating for the student loan consolidation and IBR thing. I cannot believe how long this is taking. It's been over 90 days now and is downright ridiculous. I always get some friendly, perky CSR who tells me it's "in process" and "should only be another 48 hours". 10 days ago. Right. Very frustrating as it's the other big hurdle I need to clear right now. I just need the documentation so we can move forward to UW once and for all.

Re: (Hopefully) My Journey to Homeownership

jules0580 — Fri, 29 Jun 2012 17:44:31 GMT

Good for you! Congrats and good luck with the rest!

Re: (Hopefully) My Journey to Homeownership

thankfulheart — Sat, 30 Jun 2012 14:56:20 GMT

{hates working 3rd shift}

While I was asleep yesterday, the credit company called to say they needed to do a conference call with the former mortgage co. for the credit supplement. Since I missed the call, I will have to wait until Monday for that. Never done one of those before, so will be a learning experience.

NelNet got 1/3 of my loans consolidated and finally applied IBR to it. Kinda. Sorta. The amount is wrong and once all 3 loans are inhouse, it will get fixed, but it's the best we can do for now. They are saying another 30-60 days to finish the consolidation, so basically 6 months from when I initially applied. RIDICULOUS. I've emailed the ombudsman to see if they can help at all as it has been a nightmare. Then, I can't seem to get ACS or Direct Loans to report correctly. ACS is PIF, and DirectLoans is reporting a $2 balance on a loan that was PIF ages ago, but for some reason showed another $2 owing, so I paid it back in February. I figure I will die of an ulcer before my student loans are paid off at this rate.

For kicks, I wrote letters to my former state representatives asking them to follow the IRS example regarding paid tax liens. Seems unfair to be put in a "debtor's prison" for a 7 year term on a debt that was PIF within a few months of the lien being filed (which was as soon as I learned of it). We'll see if that does anything.

I'm also considering GWing the old mortgage company as they are the only other real baddie on my CRAs. Now that they are PIF, I'd like them to delete the tradeline altogether (there were extenuating circumstance, including a FEMA event). I'd love for a pre-closing pull to have an even shinier credit report (and I'm still gunning for a great Lowe's CL!).

Re: (Hopefully) My Journey to Homeownership

jules0580 — Sat, 30 Jun 2012 18:54:06 GMT

I keep reading about go letters. What exactly is at, is it asking a company as been paid in full that has previous bads to delete? Does this work usually I would love to get that off my report. Can u give me an idea of what u say in them? Any info is greatly appreciated

Re: (Hopefully) My Journey to Homeownership

thankfulheart — Sun, 01 Jul 2012 03:24:52 GMT

@jules0580 wrote:
I keep reading about go letters. What exactly is at, is it asking a company as been paid in full that has previous bads to delete? Does this work usually I would love to get that off my report. Can u give me an idea of what u say in them? Any info is greatly appreciated

A good will letter is a request for the OC to do something, whether remove negative notations or the tradeline altogether. Basically, I just explain what happened at the time so they can see that it was a one-off event and ask nicely for them to forgive me. I have GWed the mortgage company before, but they insist that they must report accurately (I get it). The thing is they are NOT required to report at all, so hoping for a TL deletion. Several other companies have removed 30-60 day lates for me via GW letters, so it does work.

Re: (Hopefully) My Journey to Homeownership

jules0580 — Sun, 01 Jul 2012 12:52:47 GMT

awesome thanks!