I'd like to share some fresh (11/17) info regarding Navy Federal mortgage.
First, they were great to work with. Initially, you will be assigned a loan officer who will intake information and walk you through the various products that they offer. In the final stages of pre-closing and closing you will be assigned a loan processor, who will work with you to make sure that you have all docs needed, etc.
Many of the questions I saw when doing my research here and on other forums seemed to come from people with a less than perfect credit history. I was no exception to this. I had a foreclosure 9 years before applying and had been working for about 18 months to get the my DTI down as low as possible. Additionally, I had not had any lates for a little over 4 years. That said, the 2010 to 2012 period was pretty ugly. At the time of my application, my front-end DTI was about 7% and my mid score was 686.
This needs to go in it's own paragraph so that it stands out: NFCU does NOT use its own credit scoring model. They pull all three, just like everyone else.
If you're interested, the next threshold for a lower rate was a 720 mid score when I applied. The difference in my 686 vs a 720 was a couple of points, so not a deal killer for us.
I know this may be obvious, but I want to add a data point regarding the newer scoring models that CreditKarma reports and the old school models used by underwriters. My TU and EQ scores on CK were about 760 at the time I applied. I had heard about mortgage scores being lower, but in my head I had a 10 to 20 point delta, not 70-ish points. Moral of the story: check your mortgage scores before you apply.
Due to limited funds for down payment, we went with the 100% financing. Yes, it's slightly more expensive, but here we are. Within the 100% financing they have a variety of adjustable and fixed rate products with options to pay down the rate. I did an ROI on the paydown options and found it didn't really make a lot of sense to do it, so we passed.
I'll also share a few things that came up, just to give folks as many data points as possible. I had a bank over draft line of credit. About 6 months before I applied, the bank decided not to offer that product any more, so they closed the account and continued taking the monthly payments from my account. Because it reflected as "closed" on my credit, NF required that it be paid off.
I also had an account that was CO in 2011. It has dropped off all CRAs, except TU, which shows it open, 120+ days, and over $400 past due. It also shows a last reported date in early 2011. Absolutely zero possibility that I wanted to touch that account, given how close it is to having any derog fall off. I was able to retrieve an archived CK report, which showed the CO on TU, but because CK no longer allows you to retrieve archived reports on the website I had to do a screen shot from my phone. That wasn't acceptable at first, but when paired with an email explanation, the problem went away.
The only stressful event was when I discovered a difference between their online application and the standard form that it creates. I don't recall being asked if I had "ever" had a loan foreclosed on the online app, but it's on the standard form. Of course I discovered this on the standard form at about 8pm on a Friday night. This led to all sorts of online research to see if a foreclosure "ever" would DQ us, would the find out, etc. This was a long weekend. I called NF first thing Monday and explained the situation. My processor felt bad for me: because I had spent a weekend stressing over something that was "not a problem at all."
As an additional data points, my wife doesn't work presently and it was no problem having her on the loan as well. They also do multiple rounds of employment verification. I saw the form they required our HR to fill out. One of the questions I thought was interesting related to the probability of continued employment for the next 12 months. They also use bonuses as income, on a two year averaged basis. So, if you received a $10,000 bonus in year 1 and an $8,000 bonus in year 2, they will call it $9,000 for income purposes. Note: you need at least two years of bonuses.
Also, our loan is a jumbo loan, which I had a lot of questions about qualifying for, but again, NF's party line was "no problem," even with my history.
My advice to anyone considering in NF would be to get your DTI (front end) as low as possible and get your mid-score at least above 680 (this was mentioned as a cutoff for my rate tier) and ideally above 720. Lay everything out with your load officer on day 1 and you will probably be surprised that having some financial turbulence on your tail isn't as bad as you might think.
I hope this helps.
Thanks for your experience with NFCU and getting a mortgage - even with tighter "standards" today, I think we all have stories of what a pain it is getting a mortgage. I swore after I purchased my second house I'd never get another mortgage and I didn't have any credit issues when I got that one - of course, I have since had several additional mortgage loans, but they never seem to be easy and the hiccups always seem to be stupid stuff.
Enjoy the new home and being "grandfathered" as far as mortgage limit tax write-offs before that gets squashed in 2018
Wow, thanks so much for this. I have read just about every older NFCU mortgage thread on this darn board, and while reviews are generally positive, I like what you've laid out insofar as your credit "negatives" and how you navigated them with NFCU... (or, from the looks of it, didn't have to navigate too hard as you'd already done the work!)
I'm just about to apply for the Homebuyer's Choice as well. I recently paid off two smaller balance CC's, and I was hoping for a boost in mortgage scores-- right now I am ON THE LINE at 720. We'll see.
My loan officer said they'd require "60 Days" worth of bank statements for seasoning money my wife deposited in a shared savings account -- did you have any experience with this? The reason I ask is, 60 days from when the large deposit was made falls right in between the statement cut dates-- do you know if they look at 60 calendar days, or two months' worth of statements? I could ask the LO but frankly I don't want to sound weird. LOL
Also, if you don't mind, did you use an online calculator tool or such to determine whether the paydown was worth it? I understand conceptually the ideas behind points, etc. but I AM TERRIBLE AT MATH so I'm looking for a way to run the numbers for myself over coffee.
Thanks again, and congratulations!
They do require two months of actual bank statements. I honestly don't know if a spouse can give you a gift letter, but if she is on the loan, I can't imagine this being a problem. We were scheduled to close on my birthday, so my folks decided to kick in a little for the closing. I didn't need the funds, but I had to explain the deposit, so I did a gift letter. They want the letter, plus your statement showing money in and the "giver's" statement showing the same money out. I would just ask your LO how to handle it. Money from your wife shouldn't be a problem for them.
As for how I figured out if they pay down was worth it, I used Excel. You're trying to figure out how many monthly payments it will take at the reduced payment to at least equal the extra you are spending up front. So, if it costs you $5,000 up front to save $20 a month, it would take 250 months to recover the $5,000 (5000 / 20 = 250). There are ways to add even more complexity to this, but for spitballin' purposes, this is the basic computation.
Congrats on hitting 720! All of my derogs will be off in about 24 months and I am counting the months.
I'm sorry for resurrecting an oldish thread, but your post came up in a search for NFCU. It's very helpful. I wonder if you could give some idea of what NFCU's closing costs were on a jumbo Homebuyer's Choice mortgage and what kind of reserves they required. I am very interested in this type of mortgage.
If I may ask, what was the rate that you received? and what would it have been if you were at 720?
The rates a month or more ago would be different from the rates today. Why don’t you just call and have a LO email you a cost sheet?
Or go to NFCU's website and click compare mortgage programs