GOING THROUGH MORTGAGE LOAN PROCESS AND IM SCARED OF UNDERWRITING

[Anonymous]

I recently applied for an FHA mortgage loan through NFCU (Navy Federal Credit Union) with not so great credit. My mortgage Fico scores was TU 605 EQ 612 Exp 580. The first time I applied was back in February with scores all less than 580 (because I didn't know there was a difference in scores) and I was denied of course, because of my scores. I received a letter the of denial in the same week although they said a LO would contact me and they also asked me to upload income verification, etc. This time, even if you don't submit the app, they run your credit, I just went ahead an submitted it although I was only trying to set up the application for submission (because I was working with another lender) and I waited for the denial letter. To my surprise, no denial letter came and an LO actually called me to go over the app and start the process.

I initially had no intentions of working with NFCU but the other company was taking FOREVER to give me a pre-approval letter. The day I applied with NFCU is the same day the other lender finally gave me the pre-approval. Go figure!  Long story short, the lender ended up messing me over and I had already had a contract to buy (5/9/18). So I called my Navy loan officer and even though I never did my pre-approval with them, he said to just send him the contract right away so we could get started (5/17/18) and he would send me straight into processing. I had an original close date of 5/30/18. He collected everything from me that he needed to start my process and we had to change the close date to 06/16/18. On 5/18/18, I went into processing and on 5/21/18 my appraisal was ordered.

5/23/18 my processor finally called me and requested 8 documents from me and also told me to go ahead and activate the Homeowners insurance. We went over my income (48k a year) and she said she could make it work. The house I'm purchasing is $195k. There's a repossession ($7k), furniture ($900), and a credit card ($800) all on my credit as derogatory (charges before 2015). Aside from that, I just have 6 credit cards, 2 with Navy and they are the only ones that have a balance --- two $15k limits, both balances under $1k and then there is my student loans -- $13k. Nothing else. No car note, loans, nothing.

My processor and LO seem sooo confident that I have nothing to worry about but I am so scared of underwriting and I know they have the last say so. I can't stop reading things that I find online. The scariest one was seeing some one cleared to close and two days before they closed, the decision was rescinded. I just know I will be crushed. Anyone have any advice for me on how to cope or deal with this or provide some insight on what is to come?

PLEASE!

[avp99]

First of all congratulations on taking the first step and getting pre-approved.  So what I am writing is from my own perspective and I understand everyone experience will not be the same.  However, I was also scared has heck especially of underwriting. Well, I went through the whole process of finding my perfect home, placing the offer and counter offers, inspections, appraisals, insurance and then being told I was going to the dreaded underwriting.  I, like you had read so much of how awful this entire process would certainly be, all the questions, the documentations and only to be told it was not going to happen......  But.... that was not my experience at all, as soon as the processor gathered about a 8 pieces of documentation, she sent over my file to underwriting.  Not having heard anything from them after two days and assuming the worst, I sent an email to the processor saying I was just checking in and making sure there was nothing else that they needed from me. This is when she wrote back that my file had final approval and was now moving on to the closing department where they would draw up the closing documents and give me the final costs for closing day.  She also said I would be hearing from my title company to set up the day and time for my closing (my closing date was originally set for June 15, but maybe it can move up).

Anyway, for me all the horror stories I read on here and on Internet sites about underwriting just did happen. In fact i have to say this has been a pleasant process so far. So if I could give any advised based on my own experience so far, it would be;

1. remain confident

2. remember, most people who take the time to post stories are posting that bad things that has happened to them or they have heard happening. Fewer people take the time to tell others about their good experience

3. when your loan officer or processor asks for an explanation or document, don't take it personal and get it to them right away

4. stay in touch with your loan officer, if you have not heard from them in a few days, just send them a friendly email asking if there is anything else they would like you to send in.  I sent an email a few days ago asking what they calculated my debt to income ratio was just to keep open lines of communication between us.

So there you go, it is totally normal it have some fear.  But if this house is yours, it will all fall into place for you so take a deep breath and if you can, enjoy the ride.. it will be worth it when they hand you the keys to your new house.

[Anonymous]

I understand where you are coming from as we are in the same position!

We got preapproved from two lenders only for them to tell us it wasn’t going to work after being in contract. We didn’t even make it to UWing. 

Third lender has been great and thinks it should all work. File was sent to underwriting on the 18th. It’s been a week and we have heard nothing. It’s so nerve wracking. 

Ive tried to keep in touch with LO but not be too annoying. I just sent a message Wednesday and she said haven’t gotten anything back. And I sent another yesterday afternoon but didn’t get a reply. Now we have to suffer through the long 3 day weekend with the unknown. 

Our case is a little tricky since we are going USDA and we have a situation that another lender saw as outside the guidelines but this one didn’t. 

[Anonymous]

Thank you!! I was ok up until just now when I started thinking of my tax returns... does it play a major role in the deciding factor, that you know of? I did put in some losses on it and Im hoping it doesn't affect it. Initially my LO said they don't really look at them but they wanted them just incase they needed them.. 

[avp99]

to be honest, i know they requested my tax transcripts (FHA requirement as I understand it).  Not sure how much of a factor it was, but then again my taxes are pretty simple and straight froward. I am not 100A% sure, but I would think they use them to verify employment, income and maybe any tax liens?  I mean, those are the only things I can think of at the moment.  I am sure there are others here with more experience than myself.

[Anonymous]

I'M TRYING to think of a 1000 things to do so that I can't think about it. Currently at work, back to back clients and I still can not focus. My processor told me that she will not be getting back to me until the end of next week because so many people are closing and she need to get them ready for the 30th.. so maybe thats why  you havent heard anything back... maybe... when do you close?

[avp99]

My closing day is set for June 15th, but I was told it could be earlier.

[2IMPROVE]

I've heard nothing but good things about NFCU!  You are in good hands they look at the big picture and don't necessarily base everything on your scores.  Breathe it is going to work out!!!! Congratulations!

[Anonymous]

No lie, that “Congratulations” really eased me!! Thanks a lot!

[dynamicvb]

I totally understand the angst you are feeling. I’m in the underwriting waiting to. My LO seems to think everything is going to go fine. They have not asked me for anything additional since I submitted everything with the app. I’m not sure if that is because my LO is on the ball or not. I was hoping to hear something back before the weekend but won’t know until next week. I’m keeping my fingers crossed for you and myself