We are first-time homebuyers. This has been a long journey, with much help and research occurring here - we never would have thought we could purchase a home in Southern California but we beat out multiple offers and are officially under contract! My stomach is still in knots and I'm not 100% sure about the process.
We were pre-approved for FHA via AUS - that was provided to the seller with the offer I'm assuming to show that we had a likely chance of being approved? - but I never saw the actual document. Appraisal and home inspection were ordered. Downpayment and closing costs more than covered with some wiggle room if additional costs surface. Paid off a massive amount of debt and our DTI is around 3% - no credit cards or auto loans, just a big student loan. Spotty credit though with fairly recent lates but I managed to get a collection removed.
We were instructed to take out Homeowner's Insurance and our mortgage broker included the actual name of a mortgage company on the insurance document, no loan number yet...does anyone know what's next in the process? I've heard horror stories about things going awry and just can't kick the nervousness...
Congratulations! I am going through this too, and it hasn't been a headache until a few days ago. First, they asked me for my paystubs, they verified employment with my employer, bank statements and tax returns. (I only had one because I had a two-year gap).
The only thing I can really warn you about is, do NOT do anything on your credit. Don't apply for a loan, don't use your credit cards if you're not going to pay them off to the exact balance you were when they ran your credit. And if you have anything in dispute status, they will make you remove the dispute comments. Removing dispute comments for me, caused my credit score to tank, and now my medium score is not high enough for this particular bank. It is below the 620, even though FHA is 580, this particular bank has overlays. So here I am a few weeks before closing, and I need 15 points for my credit score for the final approval. They're doing something called a rapid rescore. My LO is confident this will work, but I am beyond nervous. I will know this week. If not, they will have to withdraw my loan, and go to another bank. Please make sure if there is a problem, you are allowed to withdraw prior to them denying, as a denial with FHA will make it impossible to get approved with another bank. I would ask this ASAP.
Although there are horror stories, I am sure they are few and far between, we always hear the bad stuff and not always the good. Just be diligent. Good luck to both of you!
You will also sign a lot of edocs. If you are too close with credit, I would suggest (under the advice of your LO too) that you pay down whatever accounts you have to allow some wiggle room for credit score drops. They have run my credit several times. . . causing my score to drop.
Thank you so much for 1- commiserating and 2-the advice! I actually had an unexpected charge on one of my cards and just immediately paid it. Good reminder to stay vigilant until I'm out of the woods of this nerve-wracking process.
Everything worked out great for us! We closed on our house last month, it's currently under a huge renovation and we can hopefully move-in by mid next month I can't say it was a particularly unstressful process, it really does just take patience and suffering through it.
Just be as fast and responsive as possible with anything they ask. Pour over your bank statements line by line - that's what delayed us a few times, large deposits and payoffs (we paid off a ton of debt before applying). Get any documents you might need up front.
Most of all - hang in there! There's a house at the end of the tunnel, good luck!