Waiting anxiously on Navyfed Military Choice

[Anonymous]

We have been waiting patiently for a week for our loan officer to contact us after submitting our preapproval application and uploading our documents.  The voicemail response is that she will review it by the end of the day.

Can anyone tell me if this is good/bad indifferent and if our chances are good?

Details:

Our Fico 5 scores are  556 and the Fico 8 is 645.  I didn't realize that the FICO 5 is mostly used for mortgages.  Has me scared.

Credit Negatives:  1 retail card60 days late in 2015.  1 closed account saying that we are 30-60 days late (dispute put in), my wife has about 3 30 day lates in the past two years.  While deployed, I managed our bills and did horrible at it.  Retired now, so improving.

Gross Income:  187,000/year includes both our incomes, my retirement and va compensation.

DTI:  Front end:   23% (Just debt), Back end:  46% with the amount/loan we are asking. ($500,000)

Employment:  I am retired, with VA dis compensation, wife is employed with Civil Service for about 20 years.

Assets:  We have 3 TSP accounts adding up to about $50K

Property:  The Property is in Kitsap County, Wa and we want to put in an offer on a lot when it comes available.  We are expecting them to offer the home at about $490K with the upgrades we want.  It will be new.

Occupancy:  We have owned two houses, sold the recent one about a year ago before relocating here.  We are leasing and this will be our forever home to pay off for retirement.

Transaction Type:  Pre approval for offer on new construction.

We don't have much for a down payment and would like no down payment, thus the Military Choice loan from Navyfed.

Sorry so long.  Thanks for any feedback, tips or information.

[Anonymous]

Good luck.. scores are rough but we'll see. Why can't you do VA?

If you do get approval, ask about the 5/5 ARM. You can get a lower rate with no funding fee still 100% financing.

[Anonymous]

Yes, the scores are.  I can do VA, but Navyfed wants 100% of the difference between 500K and the 424,100 VA guarantee.

The downpayment on that amount with 25% of the difference is about 20K through a lender like Veterans United.

I will ask about the ARM and potentially refinance in the future if we get approved and I can raise our scores.

[Anonymous]

Well, just got off the phone with the loan officer.  Her concern was the DTI-54%.  She is sending it to underwriting to see if we will get approval.  She said they like to see it at 45%...

My initial DTI calculations must have been off based on the taxes and the payment...

[VALoanMaster]

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@Anonymous wrote:

Yes, the scores are.  I can do VA, but Navyfed wants 100% of the difference between 500K and the 424,100 VA guarantee.

The downpayment on that amount with 25% of the difference is about 20K through a lender like Veterans United.

I will ask about the ARM and potentially refinance in the future if we get approved and I can raise our scores.

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Hi Hartjam,

I really think you're going to have a really tough time getting approved with NFCU based on the info you've provided for a couple of reasons.

1) The loan amount you're looking for is over the conforming limit (jumbo) & most lenders have more restrictive guidelines on their jumbo loans.

2) NFCU is notoriously conservative.

The flip side is VA doesn't have different guidelines for jumbo loans so you need to find VA lender that follows the VA guidelines without adding overlays and put down the 20K (which is only 4% of the purchase price) & go VA.

Another reason to go with a regular VA loan is we can gross up your VA disability income to help lower your debt ratios.

Stay away from the ARM loans unless you know you'll be out of the house in 5-7 years.

Here's why.

There is no way to know what' rates are going to do tomorrow let alone 5 years from now. One thing we do know is, they are probably going up so you'll end up with a higher rate later then what you can get now. The other thing to consider is this, closing costs. Any money that you could potentially save now is going to be eaten up when you factor in the additional closing costs that you'll pay to refinance your loan.

[Anonymous]

Thank you for the feedback, VALoanMaster.  We will see and I really think I should see a mortgage broker and not a specific lender to prevent more than 1 more pull in the same month from my report for the preapproval if NFCU falls through.

[VALoanMaster]

You're better off working with a mortgage banker rather than a broker. A mortgage banker is hybrid lender that offers the flexibility of broker (see: multiple investors to sell your loan to) while also maintaining control over the entire process. One of the biggest issue with brokers is they are at the mercy of whichever lender they send your file to where a mortgage banker underwrites, closes & funds your loan in house which means we control the process and can make sure your loan closes on time. In addition to that, when I pull a credit report, it's good with every investor we sell our loans to but that's not the case with brokers. They may have to have a credit report pulled from a different vendor for each investor.

[Anonymous]

Thank you for that bit of knowledge.  I did not know there was a distinction.

[Anonymous]

We ended up not getting approved through underwriting for the Military Choice no money down loan.

We did get approved for a VA Jumbo Loan @3.5%, for 500,000 with a $19,875 down payment to cover 25% of the amount over the loan guarantee limit.

It is really a much better deal for us.  It is good until 30 October and we won't close at the earliest until January.

We are ready once the lot is announced ready for offers!

Our dream home is a reality.  Next step is to continue improving credit until closing and find the $19,875 plus closing costs.  They want to see $47,480.59 in verified assets to close.  I hope our TSPs suffice for that.

[pizza1]

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@Anonymous wrote:

We ended up not getting approved through underwriting for the Military Choice no money down loan.

@Anonymous did get approved for a VA Jumbo Loan @3.5%, for 500,000 with a $19,875 down payment to cover 25% of the amount over the loan guarantee limit.

It is really a much better deal for us.  It is good until 30 October and we won't close at the earliest until January.

We are ready once the lot is announced ready for offers!

Our dream home is a reality.  Next step is to continue improving credit until closing and find the $19,875 plus closing costs.  They want to see $47,480.59 in verified assets to close.  I hope our TSPs suffice for that.

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Im glad it all worked out for you, and you were approved regardless! Sounds like youre happy with the way things turned out, and your dream of a new home is going to be a reality very soon!! Congrats to you