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Second Mortgage showing as Personal Loan

TXPocohontas
Regular Contributor

Second Mortgage showing as Personal Loan

So I purchased a house in Texas and closed on Feb 5, 2020.  They offered a first time homebuying program which puts the down payment/closings costs the builder did not cover into a second mortgage (they waited until I was at the closing table to show me that paperwork).  Anyways, the caviat to this that it is on my credit reports but I cannot make ANY payments on it until I either pay off the main mortgage loan or sell the house (which goes back to paying off the first mortgage loan).  I have always paid early and made extra principal payments each month to the first mortgage which lowers the balance but the balance obviously never changes on the 2nd mortgage loan.  My question is how do I get an underwriter to understand this?  I am in the process of buying a 2nd house in Nevada that is being built.Here is my Experian to give you an idea.Here is my Experian to give you an idea.

Thanks in advance for advice.

 

Happy Holidays!  

 

Starting Fico 8 Score Dec 2019: 469 TU 501 EQ 453 EX
Current Score: 791 TU 769 EQ 784 EX
Goal Score: 820 Across the board
First Premier CL $300 BAL $0, Lane Bryant CL $750 BAL $0, Credit One AMEX CL $600 BAL $0, NFCU Visa CL $9100 BAL $0, Capital One QuickSilver CL $2000 BAL $0,Ashleys Homestore CL $3500 BAL $0,
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Message 1 of 6
5 REPLIES 5
dragontears
Senior Contributor

Re: Second Mortgage showing as Personal Loan


@TXPocohontas wrote:

So I purchased a house in Texas and closed on Feb 5, 2020.  They offered a first time homebuying program which puts the down payment/closings costs the builder did not cover into a second mortgage (they waited until I was at the closing table to show me that paperwork).  Anyways, the caviat to this that it is on my credit reports but I cannot make ANY payments on it until I either pay off the main mortgage loan or sell the house (which goes back to paying off the first mortgage loan).  I have always paid early and made extra principal payments each month to the first mortgage which lowers the balance but the balance obviously never changes on the 2nd mortgage loan.  My question is how do I get an underwriter to understand this?  I am in the process of buying a 2nd house in Nevada that is being built.Here is my Experian to give you an idea.Here is my Experian to give you an idea.

Thanks in advance for advice.

 

Happy Holidays!  

 


What exactly do you need to explain? Is the underwriter asking about it? What are they asking? 

Message 2 of 6
TXPocohontas
Regular Contributor

Re: Second Mortgage showing as Personal Loan

@dragontears Yes.   Asking why I am not paying on it.  Just want to make sure this does not mess up my loan approval. 

Starting Fico 8 Score Dec 2019: 469 TU 501 EQ 453 EX
Current Score: 791 TU 769 EQ 784 EX
Goal Score: 820 Across the board
First Premier CL $300 BAL $0, Lane Bryant CL $750 BAL $0, Credit One AMEX CL $600 BAL $0, NFCU Visa CL $9100 BAL $0, Capital One QuickSilver CL $2000 BAL $0,Ashleys Homestore CL $3500 BAL $0,
LATE PAYS/COLLECTIONS/BANKRUPTCIES/CHARGEOFFS/JUDGEMENTS 0
Message 3 of 6
VALoanMaster
Valued Contributor

Re: Second Mortgage showing as Personal Loan


@TXPocohontas wrote:

@dragontears Yes.   Asking why I am not paying on it.  Just want to make sure this does not mess up my loan approval. 


Generally when you have a silent 2nd mortgage like this it means there are no monthly payments required and the loan is usually forgiven in 3 to 10 years depending on the program.

For example: 

https://www.idahohousing.com/documents/down-payment-and-closing-cost-assistance-programs.pdf

 

This shows the loan has a tiered forgiveness feature where the loan is forgiven at 10% per year.

You should have signed a note at closing with all of the terms for this loan. You may need to provide a copy to the u/w.

VA Mortgage Expert. Mortgage Banker lending in All 50 States.
VA, FHA, USDA. Jumbo, Conventional.
CAIVRS Expert.
Message 4 of 6
VALoanMaster
Valued Contributor

Re: Second Mortgage showing as Personal Loan


@TXPocohontas wrote:

@dragontears Yes.   Asking why I am not paying on it.  Just want to make sure this does not mess up my loan approval. 


I just realised you said you bought a home in Texas but the lender used an Idaho DPA program?

VA Mortgage Expert. Mortgage Banker lending in All 50 States.
VA, FHA, USDA. Jumbo, Conventional.
CAIVRS Expert.
Message 5 of 6
TXPocohontas
Regular Contributor

Re: Second Mortgage showing as Personal Loan

@VALoanMaster Yes.  Loan Depot sold my loan 30 days later to HomeLoanServ aka Idaho Housing.

 

Thank you for the valuable information. 😃

Starting Fico 8 Score Dec 2019: 469 TU 501 EQ 453 EX
Current Score: 791 TU 769 EQ 784 EX
Goal Score: 820 Across the board
First Premier CL $300 BAL $0, Lane Bryant CL $750 BAL $0, Credit One AMEX CL $600 BAL $0, NFCU Visa CL $9100 BAL $0, Capital One QuickSilver CL $2000 BAL $0,Ashleys Homestore CL $3500 BAL $0,
LATE PAYS/COLLECTIONS/BANKRUPTCIES/CHARGEOFFS/JUDGEMENTS 0
Message 6 of 6
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