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Am I worried for no reason?

Member

Am I worried for no reason?

Okay, we are in the process of relocating and my husband is transferring within the same company.  His salary is 84k now, will be 90k when we move in a month or so.  I stay at home, so no real income.  We are looking for houses in the 250k and under range.  Our debts outside of mortgage run around 900 a month, with 7000 current monthly income, will be 7500 when we move. We filed a medical bankruptcy in 2013 that was discharged Dec. 2013, so we are outside of our 2 year restriction with FHA.  We have a home in another state that we have rented out for the last 5 years.  We are in the process of selling it and should clear around 18k.  We have 15k in the bank and around 50k in retirement accounts.  

 

We were pre-approved through Mortgage Lenders of America and were under contract for a home until the loan agent discovered the new FHA rule about 100 miles between properties and we have to close on our first house before we can close on a new one.  We are moving back to the state we used to live in and the homes will only be 70ish miles apart.  We ended our contract on the new house because the sellers did not want to wait until we had a buyer and closed on ours. The bank suspended our application and now we are waiting for ours to sell.  

 

Everything was moving along so well and now that we hit a roadblock I am panicking.  Do I have any reason to be worried that we ultimately won't be approved? Other than the bankruptcy, we have no negative accounts. We do not have any collections and no late accounts before or after the bankruptcy. Median score was 675. Our debt is higher than we want it to be, but as best I can tell, we will still qualify for the size mortgage we want.  For a 1600/month mortage we would be at 21% front end, 33 % back end dti.  

 

Am I panicking for no reason? 

Message 1 of 3
2 REPLIES
Moderator Emerita

Re: Am I worried for no reason?


sheryl37013 wrote:

Okay, we are in the process of relocating and my husband is transferring within the same company.  His salary is 84k now, will be 90k when we move in a month or so.  I stay at home, so no real income.  We are looking for houses in the 250k and under range.  Our debts outside of mortgage run around 900 a month, with 7000 current monthly income, will be 7500 when we move. We filed a medical bankruptcy in 2013 that was discharged Dec. 2013, so we are outside of our 2 year restriction with FHA.  We have a home in another state that we have rented out for the last 5 years.  We are in the process of selling it and should clear around 18k.  We have 15k in the bank and around 50k in retirement accounts.  

 

We were pre-approved through Mortgage Lenders of America and were under contract for a home until the loan agent discovered the new FHA rule about 100 miles between properties and we have to close on our first house before we can close on a new one.  We are moving back to the state we used to live in and the homes will only be 70ish miles apart.  We ended our contract on the new house because the sellers did not want to wait until we had a buyer and closed on ours. The bank suspended our application and now we are waiting for ours to sell.  

 

Everything was moving along so well and now that we hit a roadblock I am panicking.  Do I have any reason to be worried that we ultimately won't be approved? Other than the bankruptcy, we have no negative accounts. We do not have any collections and no late accounts before or after the bankruptcy. Median score was 675. Our debt is higher than we want it to be, but as best I can tell, we will still qualify for the size mortgage we want.  For a 1600/month mortage we would be at 21% front end, 33 % back end dti.  

 

Am I panicking for no reason? 


Don't panic. I'm not a LO, but your info sounds like you would have no issues (from your post). 

 

I thought that the distance required was 50+ miles but there could be a lender overlay that makes it 100 miles or more. One of the LO's might be able to clarify that point. Each lender can have their own overlays to make FHA guidelines more restrictive rather than less restrictive. Have you considered another lender?

Message 2 of 3
Member

Re: Am I worried for no reason?

Thanks for your reply. It used to be 50 miles, but changed with new rules in Sept 2015. It's definitely an FHA restriction, so new lender won't help.

http://www.375loan.com/blog/e_784/Keeping_the_Real_Estate_industry_informed_/2015/8/New_FHA_rules___...
Message 3 of 3