Long story short- I have been in rebuild mode for some time. I have never posted on the mortgage board before, but am hoping for some insight.
Credit pic- after a lot of work, scores are as follows: Lender pulled- EQ 522, EX 613, TU 619. FHA for our bank is 580. Applied for preapproval and got the letter the same day. The house we already knew we wanted was still available, so we put in an offer, which was accepted 11/20. We have the down payment saved. The house is 240K.
Negatives: we have 2 open medical collections ($350 total) which loan officer told me to wait and see if underwriting wants them paid or not as they could drop our scores upon payment. Filed BK in Feb 2006. We have 4 paid medical collections, and 2 other paid collections (non medical) from 2010/2011. No lates in the last two years. One CO from 2010 that is paid in full. And one medical judgement from 2009 also paid in full.
Positives: We have had 4 flawless auto loans post BK, two paid off, and two open and current. 2 personal lines of credit with no lates and both are 5 years old, 3 credit cards all flawless, and 4 years old or more. Util at 68% (she told me to save rather than lower this). 4 student loans are all current and paid on time.
Hubby makes very good money. DTI is like 16% without overtime factored in, and is 6% with it factored in (this is not including the mortgage of course). Approval was based on his salary only, and did not count his 40K a year in OT which they can use if need be as he has two years of consistent OT.
We have submitted everything we need to. W2s, taxes, bank statments, etc. We have just enough for closing saved as of now, but will have another 5-7K saved by Feb. 1st closing date. We have $3800 in 401K for reserves (although its not all fully vested) if we need to use that, but saving should be enough alone I think. However, we will be right up until closing in saving that money.
We did get a tax bill recently that we are paying back in a payment plan, and I did not tell the bank about it. Not sure if anything will come out of that, it will be paid in full Feb 15 (its only $1300).
I am getting nervous, as I have not gotten an official approval and the loan is still in underwriting. We already paid for the inspection, and the appraisal was scheduled by the bank and is due back to the bank no later than Jan 23. How long should underwriting take? Its been two weeks today. I know appraisal will be fine, as comps are higher in the area, and sellers are willing to come down if they have to since they are moving out of state. Looking at what I have provided, should I be worried? Are we at high risk for it falling apart? We have three kids and its the middle of winter here, and I have already given notice on our rental.
Please let me know if and what I should be worried about, or if you all think we are okay for approval! Thank you!
Starting Score: EQ 416 TU 498 EX 468 Lender Fico's July 2012
One thing that I can add to your post is that you cannot make it through underwritting without the completed appraisal. That is a requirement of all underwriters.
Today when I talked to her she made it sound like there is some preliminary underwriting process to go through..... I know that nothing final will happen before the appraisal. But I think from the way she made it sound that once the appraisal happens that is just the final okay, and we already know that the seller will drop their price if the home appraises low. Honestly, that is my least concern. I am worried that something is going to come up with financing. We have a 33 point cushion on the scores, and I will have util at 50% by closing. I am just wondering if there will be some 'red flag' since we don't have flawless history. Or am I being paranoid? I mean I doubt they would have preapproved us if there was some huge issue, but still..... it all seems to good to be true, and you know what they say about that.
@Section700 wrote:he told me to make sure I keep my UTIL under 10%. Your income is much more so maybe that's why she recommends that.
My guess is that our scores were good enough without the lower util so she didn't see any reason to keep lowering it. She made it sound like that didn't matter, and that making sure we have the money for down and closing costs plus 3 months reserves were the most important. I will still be paying down util as it know it will benefit us. We only have 2500 in CC debt right now total, so our util is already down to 55% now that I do the math. So by closing my util will sit right at 27% because I already know exactly how much and when I am going to pay the bills before/leading up to 'C day.' If anything our scores may go up by 15-20 points. It the icky credit that scares me. )o:
Aha! That must be were it is then. They are just the person who makes sure its all there and ready? Now that you say processor, I believe that is who called me about sending in statements and what not. It makes sense now. So the processor isn't making any decisions at all. Whew, I feel better about that. Also, if the appraisal comes back okay and then the underwriter decides she doesn't like something in our file, are we stuck paying for that too? Or is it basically a go after preapproval as long as we have the money, everything checks out, and the appraisal comes in? I felt like the underwriter had to review it before then so she could tell us if we need to pay off those two collections, or do anything else special like that. And also, we will have to request closing funds in advance as the bank doesn't have the cash on hand, it has to be ordered, and she told me to wait until she hears back from underwriting.... This is all so stressful. Someone remind me to never do this again, lol!
Hopefully that doesn't happen. There are so many people dependant on the closing! I mean, we would be homeless, the sellers would be out the money to close on their new house the next day, and who knows on down the line how many sales are contigent on this one. I cannot imagine how devastating that would have been for you. Glad to hear it worked out after all.