Hey everyone, this is kind of a short story coupled with my experience thus far and some questions along the way. My goal is to learn a lot while also compiling a nice fat forum for first time home buyers and/or NFCU members to read when it's their turn to buy a home.
Now, I was never actually looking to buy a home. Being 24 years old, I always thought it was out of reach. My mom never was able to buy a home before she passed away and I felt that I certianly couldn't if she couldn't.
Now, I have had a little bit of money in my savings for a while. I have $20,000 in savings and two $5,000 CD's with USAA, so I started poking around to see if I could use my mom's VA loan (which I can't) but I stumbled upon USAA's automated pre-approval section. I just figured that I spent a great deal of time rebuilding my credit so I took a shot to see if it was mortgage-qualified. To my surprise USAA gave me a 5% down pre approval that went through automated-underwriting for a total loan of up to $400,000. I was excited! $400k won'y buy a detatched home in Orange County, CA but I was still excited. So, I applied through NFCU. Based on my income and other debts, I was pre-qualified for a $999,000 conventional jumbo loan with $0 down and no points at a 5.75% APR (a little high, I know, but there's no PMI so it's built into the interest). I went through the 3 hour phone call with the rep and applied for an actual approval for $699k.
I was interested in NFCU because they handle and service all their jumbo loans, and don't send them to anyone else.
NOW, I just got off the phone with my LO (loan officer) and she said they take the middle credit score. My Experian was highest at 750, Equifax was 698, and TU was 668. I was surprised because my traditional Fico score is inverted with EX being lowest and TU being the highest. Now, Navy Fed sees your scores and gives you a rating (A, B, C, D) just like in school, and I am a B rating which at my age is apparently excellent, and it is usually a streamlined underwriting process with that grade... so I was told. My LO also said that there was literally nothing on my credit report that needed any real verification. My employers were there, my accounts were all nicely aged and current, no collections, no missed payments, 4 substantial auto accounts paid in full. My LO said "this is an underwriter's dream, and we should be able to handle this quicker than others, just get me 1 pay stub and 2 years w2's (no need for tax returns) along with your USAA accounts" My question is this: should I be excited?! Can I count my chickens before they hatch?!
I already have an offer on a house and the sellers love me. The deal is to pay "appraisal + deposit" so around $645k mortgage and they keep my $10k deposit... and the sellers pay for all expenses. So essentially I would be buying a house at $10K down, flat.
Very excited but also anxious from other threads that bash NFCU's process.
PS, my mortgage will be about $3,800 a month all in... but hey my rent is $4,000 a month in my stupid apartment. I'll be saving $200 a month + building equity.
Thanks in advance!!!
As a former Californian - that is exciting news! Congrats to you and keep making smart decisions with your credit!
I just went through a refinance with NFCU (signed closing 3/30/18) and while our scores are all higher than yours (mid to high 700's) the process was very easy and very quick. If the LO says you are golden, you should be good to go once you send in documents and get an appraisal that supports the purchase price.
Keep in mind that owning a home comes with escalating taxes, full utilities, HOA fees if that applies and "repairs" - try to see if the current owner will go for a 10 year home warranty, if not consider buying one - new HVAC can be $7-10k, new hot water heater easy $1000.... you get the idea. Also, keep in mind that you can deduct the interest you pay and for the first 10-15 years that'll be a big chunk of your payment.
Congrats on the new home and choice of lender - NFCU was great - oh and one more thing, try to settle at the end of the month because there will be less daily interest and you get to skip the first-month payment (won't be due until the following month) that's just the way it works while they get your loan registered and settled (you get to bank that $3800).
Thanks Pipeguy! I am happy to report that the home does have a new HVAC and new water heater within the last 2 years. Fortunately no HOA which is a rare find in Anaheim Hills. Remembering the home issues from my childhood, I will start a savings account for the dauting fear of a slab leak or roof issues from the Santa Ana winds we get around here.
I will take your advice and see if I can squeeze the sellers for an extended home warranty program!! Thanks so much!
PS I just reached out to my LO and asked if they want proof of my never-late rent payments and she said that the underwriter probably won't ask for it since everything is in my credit report plain as day. Things are looking up!