Sorry for the delay on the update.
We received a call from NFCU loan originator saying that due to our BK, they would not approve our loan.
Further, she indicated even with a combined MMS of 697, that wasn't "A credit" that was B.
She further quoted an current interest rate that day for a conventional at 4%! YIKES
I asked about their Buyer's Choice loan as well. She indicated that was an even higher interest rate at 4.5% & at our MMS would require 15% down. Except for the BK of course. Asked if needed an LOE for the BK, she said no that was not needed.
It appears NFCU threshold for approval is quite high & having a BK on your CR is loan they are not willing to approve (ours was 2 months from the 3 year mark).
She said I will send your application to the underwriter & they send you a letter of "adverse action".
I'm thinking, wow, the underwriter automatically denies the loan based on your recommendation alone w/o an independent review of the application submitted?
So there's no discernible difference between a loan originator & an underwriter?
I'm rather glad they didn't approve the loan. We would have NEVER agreed to such an interest rate in this market, even with the 10-15% readily available to put down.
We decided to wait until our BK ages the full 3 years + 1 month (July 8th) & apply elsewhere.
Yes, I called them a few days ago and even the lowest rate was still over 4%. Rates are going up for sure. However, NFCU does rate match so I'm still considering them for my app in two months.
What I've come to realize in my earlier years of home buying, with big banks, they'll run your info via DU and if it comes back anything other than "approved/eligible", they won't approve the loan because that means they have to manual underwrite the loan and that takes a lot more time. Big banks don't "have the time" to manual underwrite. Some don't have the capabilities to do it so I think that's why you got denied. In regards to the interest rates, NFCU rates have gon down tremendously and they rate match. As long as your score is over 680, it shouldn't be "challenging getting approved" (navy federal's words exactly).
They had no interest in our app, DU or otherwise.
They mentioned my BK13 dismissal from 2018 (3yrs ago) (which included my old house I surrendered) prior to marriage (DH not included on it).
So maybe that's their "red line" for approvals, BK's. IDK for sure in our case, just a guess...
Did you end up app'ing with NFCU for your mortgage? Any updates for us?
No, I haven't app'ed with NFCU. I decided to go with a USDA guranteed loan with builder's lender but my house is still getting built. Once it comes closer to finishing I will check rates again to see if NFCU can give me a good conventional rate that's comparable to USDA+PMI.