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NFCU Buyer's Choice question & a few others

frugal23
Valued Member

NFCU Buyer's Choice question & a few others

Good Evening Everyone,

 

I had a few questions in regards to my upcoming Mortgage application submissions.

 

1. Is NFCU's Buyer's Choice Mortgage a "Non-Conforming" conventional loan product? Would having a BK 7 discharged or Ch 13 dissmissed (3 years old) affect our eligibility to obtain this type of mortgage?

 

2. How does a loan like this stack up against an FHA loan (overlays too) for a 1st time homebuyer (which appears to be more cost efficient over time despite APR (we can streamline refi w/ FHA, although no way to remove PMI ); or Conv PMI will clear once at 78-80% LTV reached (=appx $54k) or refi:  for a $269k Loan (plan to stay in the home min 15 years), and plan to refi if rates stay low after the minimum time frame has been reached (1 or 2 years)? I'm sure our mms should be around 660+ for sure, our FICO scores range 715 & 697(won't pull actual mms score until tomorrow night). We have no collections/lates in past 2 years+, only debts currently are $9.5k Auto Loan @4.29% ($230/mth) & SL $8k @ 4.0% (if no Covid 19 auto deferment=0% now; IBR plan @ $21/month. Lastly, 1 CC (jointly) held w/NFCU $1k balance on $20k. And NFCU CLOC closed the month at $16.xx balance (oops AZEO).

 

3. Is business credit reviewed although we have no plans to include it in our qualification as income (only using W2 income), the business isn't profitable yet anyway? However, we do have a personal installment loan w/balance of $5k there at 4%.

 

4. What all can be pre paid upfront prior to closing (beside "typical stuff" = points, etc)? Are you able to prepay PMI, escrow, etc. Since the interest rate may be higher, I ac offset by paying some stuff in advance w/o folding it into mortgage to pay interest on throughout the term.

 

PS- we have 10% of loan request amt available. Could placing min amt & placing the excess $$ into investments for possibility of better returns over time.

 

Thanks in advance for any perspective you may able to provide to this situation.

BK 13 DM'D 2/2018
Personal Credit acquired since BK=$41,800:
11/2018 Cap1 QS (AU): $2000
07/2019 Discover IT (AU): $2800
03/2020 NFCU MR Amex (AU): $19000
09/2019 Wayfair: $6500
09/2019 Overstock: $850
06/2019 Mission Lane Visa: $800
10/2019 NFCU Secured (Joint)-{cov to CR Visa w/$2k}:
10/2019 NFCU CR: $10,000
FICO 8 (as of 04/8/21):
EQ: 712
EXP: 704
TU: 705
MMS EQ 5: (692)me & DH 722
TU 4 (691) me & DH 714
EXP 2: (693) & DH 699
EXP 3: (687) & DH 695
8 REPLIES 8
frugal23
Valued Member

Re: NFCU Buyer's Choice question & a few others

Bumping for insight from others on this.....

BK 13 DM'D 2/2018
Personal Credit acquired since BK=$41,800:
11/2018 Cap1 QS (AU): $2000
07/2019 Discover IT (AU): $2800
03/2020 NFCU MR Amex (AU): $19000
09/2019 Wayfair: $6500
09/2019 Overstock: $850
06/2019 Mission Lane Visa: $800
10/2019 NFCU Secured (Joint)-{cov to CR Visa w/$2k}:
10/2019 NFCU CR: $10,000
FICO 8 (as of 04/8/21):
EQ: 712
EXP: 704
TU: 705
MMS EQ 5: (692)me & DH 722
TU 4 (691) me & DH 714
EXP 2: (693) & DH 699
EXP 3: (687) & DH 695
Message 2 of 9
dragontears
Valued Contributor

Re: NFCU Buyer's Choice question & a few others


@frugal23 wrote:

Good Evening Everyone,

 

I had a few questions in regards to my upcoming Mortgage application submissions.

 

1. Is NFCU's Buyer's Choice Mortgage a "Non-Conforming" conventional loan product? Would having a BK 7 discharged or Ch 13 dissmissed (3 years old) affect our eligibility to obtain this type of mortgage?

 

2. How does a loan like this stack up against an FHA loan (overlays too) for a 1st time homebuyer (which appears to be more cost efficient over time despite APR (we can streamline refi w/ FHA, although no way to remove PMI ); or Conv PMI will clear once at 78-80% LTV reached (=appx $54k) or refi:  for a $269k Loan (plan to stay in the home min 15 years), and plan to refi if rates stay low after the minimum time frame has been reached (1 or 2 years)? I'm sure our mms should be around 660+ for sure, our FICO scores range 715 & 697(won't pull actual mms score until tomorrow night). We have no collections/lates in past 2 years+, only debts currently are $9.5k Auto Loan @4.29% ($230/mth) & SL $8k @ 4.0% (if no Covid 19 auto deferment=0% now; IBR plan @ $21/month. Lastly, 1 CC (jointly) held w/NFCU $1k balance on $20k. And NFCU CLOC closed the month at $16.xx balance (oops AZEO).

 

3. Is business credit reviewed although we have no plans to include it in our qualification as income (only using W2 income), the business isn't profitable yet anyway? However, we do have a personal installment loan w/balance of $5k there at 4%.

 

4. What all can be pre paid upfront prior to closing (beside "typical stuff" = points, etc)? Are you able to prepay PMI, escrow, etc. Since the interest rate may be higher, I ac offset by paying some stuff in advance w/o folding it into mortgage to pay interest on throughout the term.

 

PS- we have 10% of loan request amt available. Could placing min amt & placing the excess $$ into investments for possibility of better returns over time.

 

Thanks in advance for any perspective you may able to provide to this situation.


1. I believe it is classified as a portfolio loan, which means that it is not sold or backed by the government/Fannie/Freddie. From what I have read, their requirements are in line or higher than FHA, I do not know how they view BK. "Conforming" normally refers to non-jumbo loans. 

 

2. The interest is generally much higher than normal loans. 

If your mms is below 680 you will pay a ton in PMI if you go conventional loan. 

 

3. Business credit is not reviewed,  however, any loans/debts will count against your DTI. Any reported losses will count against your income. 

 

4. I think you are confused about what expenses are "rolled into the loan". PMI, taxes, insurance are items in your escrow account not in your loan, you don't pay interest on these. These items are reoccuring expenses and can change over time so not really something that can be prepaid long-term. 

There is the upfront MIP if you go FHA that is normally rolled into the loan that I am sure you can prepay if you want. 

Scores hover around 800
Haven't been AZEO in over a year
Rome was not built in a day, neither is a good credit profile
Message 3 of 9
frugal23
Valued Member

Re: NFCU Buyer's Choice question & a few others

@dragontears Thank you so much for this.

 

 Now that you mentioned it, I did phrase that wrong (so many factors to consider, "brain paused for a moment there)... LOL

 

Yeah, Were going to find out this afternoon our mms as I was waiting for our statements for March to cut first.

Based on that score will give us a great snapshot on which direction to go. Although we have a relationship well established with NFCU, it may not be in the cards for us to acquire a mortage through them considering we are not waiting another year to reach the 4 year mark & they don't currently do FHA loans either.

 

I was thinking the less that can be rolled into the loan & paid upfront, the less the monthly payment will be for the 1st year until HOPEFULLY we can refi into a lower conventional loan in 2022 (fingers crossed rates remain/lower by then). Just all those "tacking on" an extra .25% here, 1.75% there, feels daunting and attempting to eliminate much that as possible upfront feels better to me for some reason. If they are really just "fees", do they have to "rolled" into the loan, fees I just don't feel should be financed anywhere if you can avoid it. 

 

Am I looking at this the wrong way?

 

BK 13 DM'D 2/2018
Personal Credit acquired since BK=$41,800:
11/2018 Cap1 QS (AU): $2000
07/2019 Discover IT (AU): $2800
03/2020 NFCU MR Amex (AU): $19000
09/2019 Wayfair: $6500
09/2019 Overstock: $850
06/2019 Mission Lane Visa: $800
10/2019 NFCU Secured (Joint)-{cov to CR Visa w/$2k}:
10/2019 NFCU CR: $10,000
FICO 8 (as of 04/8/21):
EQ: 712
EXP: 704
TU: 705
MMS EQ 5: (692)me & DH 722
TU 4 (691) me & DH 714
EXP 2: (693) & DH 699
EXP 3: (687) & DH 695
Message 4 of 9
frugal23
Valued Member

Re: NFCU Buyer's Choice question & a few others

@dragontears & others,

@Mortgage-Specialist 

@VALoanMaster 

@iced 

@ShanetheMortgageMan

@homeloanexpert 

 

Questions:

 

1) Can you refinance the loan with a down payment assistance program attached to it in 6-12 months later without having to pay back the DPA at the time if you are still occupying the home? FHA or Conventional/Portfolio Loan change this in any way? I ask this because most of these are 0% interest paid, however you have to payback once refinanced, home sold, etc in the T&C part of the programs. Are there any DPA programs that don't require payback if you refi the loan if you are still occupying said home (ex: DPA requires you live in home for 3-5 years, however we plan to refi 1 year from acquiring the loan, how does this work in this situation)? Can it be rolled into the refi'd loan to meet the occupancy requirement & avoid the payback since it's forgivable after "x" amount of years?

 

2) Will a lender allow you to refinance the loan to another mortgage product if original loan came thru them initally. (Ex: Credit Union FHA & refi to that Credit Union's Conventional Loan product) esp since we will be at our 4 year mark (BK) 1 year from now. Or have to find different outside lender for this purpose?

 

3) If we do FHA, and the DPA program is attached to the loan & we refi to a conv loan 1 year later, will that void the DPA terms & trigger a payback at refi time? We will stay the required time, however we plan not to keep any MIP/PMI on the loan if rates are more favorable 1 year from now.

 

4) If interest rates are lower next year 2022 when we plan to refi, and home appraised value decreases since purchase (not 80% LTV) anymore, can we still refi & make up the differance in cash or by another means?

 

5) How does a property tax credit work into the PITI payment? Will our monthly payment be reduced by the credit amount at the time of loan docs or will we pay ordinary amount and the extra gets held in escrow? There's a possiblity of a $3k tax credit annually in the county we may qualify for & will not have to "re-qualify" for it on an ongoing basis either.

 

6) Can you prepay cash Section A fees upfront on a FHA loan?

 

WHEW!!

I know that's alot folks.

If you know about ANY of these situations, please don't hesitate to chime in on at least 1 of them.

I truly appreciate all the knowledge & support this forum provides, thanks in advance.....

 

BK 13 DM'D 2/2018
Personal Credit acquired since BK=$41,800:
11/2018 Cap1 QS (AU): $2000
07/2019 Discover IT (AU): $2800
03/2020 NFCU MR Amex (AU): $19000
09/2019 Wayfair: $6500
09/2019 Overstock: $850
06/2019 Mission Lane Visa: $800
10/2019 NFCU Secured (Joint)-{cov to CR Visa w/$2k}:
10/2019 NFCU CR: $10,000
FICO 8 (as of 04/8/21):
EQ: 712
EXP: 704
TU: 705
MMS EQ 5: (692)me & DH 722
TU 4 (691) me & DH 714
EXP 2: (693) & DH 699
EXP 3: (687) & DH 695
Message 5 of 9
iced
Valued Contributor

Re: NFCU Buyer's Choice question & a few others


@frugal23 wrote:

@dragontears & others,

@Mortgage-Specialist 

@VALoanMaster 

@iced 

@ShanetheMortgageMan 

Questions:

 

1) Can you refinance the loan with a down payment assistance program attached to it in 6-12 months later without having to pay back the DPA at the time if you are still occupying the home? FHA or Conventional/Portfolio Loan change this in any way? I ask this because most of these are 0% interest paid, however you have to payback once refinanced, home sold, etc in the T&C part of the programs. Are there any DPA programs that don't require payback if you refi the loan if you are still occupying said home (ex: DPA requires you live in home for 3-5 years, however we plan to refi 1 year from acquiring the loan, how does this work in this situation)? Can it be rolled into the refi'd loan to meet the occupancy requirement & avoid the payback since it's forgivable after "x" amount of years?

 

2) Will a lender allow you to refinance the loan to another mortgage product if original loan came thru them initally. (Ex: Credit Union FHA & refi to that Credit Union's Conventional Loan product) esp since we will be at our 4 year mark (BK) 1 year from now. Or have to find different outside lender for this purpose?

 

3) If we do FHA, and the DPA program is attached to the loan & we refi to a conv loan 1 year later, will that void the DPA terms & trigger a payback at refi time? We will stay the required time, however we plan not to keep any MIP/PMI on the loan if rates are more favorable 1 year from now.

 

4) If interest rates are lower next year 2022 when we plan to refi, and home appraised value decreases since purchase (not 80% LTV) anymore, can we still refi & make up the differance in cash or by another means?

 

5) How does a property tax credit work into the PITI payment? Will our monthly payment be reduced by the credit amount at the time of loan docs or will we pay ordinary amount and the extra gets held in escrow? There's a possiblity of a $3k tax credit annually in the county we may qualify for & will not have to "re-qualify" for it on an ongoing basis either.

 

6) Can you prepay cash Section A fees upfront on a FHA loan?

 

WHEW!!

I know that's alot folks.

If you know about ANY of these situations, please don't hesitate to chime in on at least 1 of them.

I truly appreciate all the knowledge & support this forum provides, thanks in advance.....

 


The questions I have some information on:

 

2. Most do. A refi is the same as taking out a mortgage on a place you already own versus taking one out for a home someone else is selling to you. You still pay closing costs and go through several of the same processes you would with a standard closing. The concern I'm imagining these days is that some lenders have tightened lending a bit, so it's quite possible that the loan you got from your bank years ago is a loan you wouldn't qualify for from them today; if this ends up being the case, then they may refuse to refi with you.

 

4. Yes, but both rates going down AND home prices going down is probably unlikely. Usually a decrease in rates pushes prices up as some Americans scramble to re-fill their budget with even more house they can barely afford. But, again, a refi isn't that different than a regular closing, so I don't see a bank not allowing you to make a  "down payment" during the process to avoid PMI or meet requirements.

 

5. My experience has always been you pay "ordinary" each month and more builds in escrow. Once a year or so, the bank will audit and review the taxes and escrow. If it turns out you get some credits or the taxes weren't as high as expected, the bank usually does a 1-year adjustment on what your monthly payment is to balance things out. That is, if you have excess in your escrow, they'll lower your payment by a little each month to draw it back down closer to where they want. So, I think to answer your question here, no you would not get a lump-sum check back, but you would see your tax payment into escrow reduce each month once you're accumulating an excess. You likely won't see any change that first year.

 

If it turns out you owe more than is in escrow, that's probably an up-front balloon payment to square things away, but truth be told I've never run into this issue; most banks usually over-estimate to keep a small padding in escrow to avoid this and to buffer against regular tax increases in a subsequent year.

Message 6 of 9
frugal23
Valued Member

Re: NFCU Buyer's Choice question & a few others

Thank you SO much @iced!

That helps a heap!

Not so bad in regards to the escrow & refinance DP option as I thought it could be given our objective. That's a positive for us.

 

Anyone able to "chime in" & provide some insight on remaining Questions 1, 3, & 6?

 

 

BK 13 DM'D 2/2018
Personal Credit acquired since BK=$41,800:
11/2018 Cap1 QS (AU): $2000
07/2019 Discover IT (AU): $2800
03/2020 NFCU MR Amex (AU): $19000
09/2019 Wayfair: $6500
09/2019 Overstock: $850
06/2019 Mission Lane Visa: $800
10/2019 NFCU Secured (Joint)-{cov to CR Visa w/$2k}:
10/2019 NFCU CR: $10,000
FICO 8 (as of 04/8/21):
EQ: 712
EXP: 704
TU: 705
MMS EQ 5: (692)me & DH 722
TU 4 (691) me & DH 714
EXP 2: (693) & DH 699
EXP 3: (687) & DH 695
Message 7 of 9
frugal23
Valued Member

Re: NFCU Buyer's Choice question & a few others

@dragontears & others,

@Mortgage-Specialist 

@VALoanMaster 

@iced 

@ShanetheMortgageMan

@homeloanexpert 

 

Update:

 

I proceeded to apply at NFCU Friday evening.

Yesterday Monday, I received an email from NFCU, was I looking for a real estate agent?

I'm thinking to myself, I only filled out an application, I don't know whether I got approved or not, why are they NFCU sending this?

So, something said, log into NFCU & see if you can find what this about.

 

WALLA! It says "HomeSquad Application -Completed".....$200+K...Next steps, Document upload & loan Team Review (i loaded all that was required on checklist prior to submission, so nothing was on that part for us to do (blank). 

Did the AU approve us automatically & someone has to do further review to contact us and send a pre-approval letter?

How long does that take?

It just seems weird to me, no other info was provided. Not the type of loan or interest rate/APR.

Were we AUS approved only? Do they typically manually review after the auto approval as well?

 

Anyone else had this experience in the beginning? Are they're any other nuiances I should look out for here?

Has anyone used their Realtor service with HomeSquad? Opinions?

 

PS: We also Submitted with 3 other lenders as well. So we are waiting to see what numbers come back to see which suits us best.

 

BK 13 DM'D 2/2018
Personal Credit acquired since BK=$41,800:
11/2018 Cap1 QS (AU): $2000
07/2019 Discover IT (AU): $2800
03/2020 NFCU MR Amex (AU): $19000
09/2019 Wayfair: $6500
09/2019 Overstock: $850
06/2019 Mission Lane Visa: $800
10/2019 NFCU Secured (Joint)-{cov to CR Visa w/$2k}:
10/2019 NFCU CR: $10,000
FICO 8 (as of 04/8/21):
EQ: 712
EXP: 704
TU: 705
MMS EQ 5: (692)me & DH 722
TU 4 (691) me & DH 714
EXP 2: (693) & DH 699
EXP 3: (687) & DH 695
Message 8 of 9
House2021
Regular Contributor

Re: NFCU Buyer's Choice question & a few others

Please update when you can, ihavesomeine that I'd like on the loan with me and their BK  is only 2 years old

Message 9 of 9
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