*edited* Wife approved for 300k loan- new lender may have screwed us last minute?

[homeloanexpert]

@Anonymous 

Generally we average O/T over the past 24 months. In some cases the most recent 12 months. What state are you in?

[Anonymous]

State NY and salary based off 80 hours biweekly which would be 60k. She has always done OT but the last 3 months has been like 120 hours or so for an example. Just didnt think OT which is not consistent would count much.

If past 12 months it is definitely not 75-80k like. 

Thanks again for the help everyone.

[JVille]

A second opinion might be a wise choice. Make sure she provides lender with last two years W2 and two full months of paystubs.

Yes overtime is averaged over last two years and YTD. If she has year end paystubs that break out base pay from overtime it's always great to have those. So final check paid in 2018 & 2019

[CreditInspired]

Hi OP

The first thing I noticed is you said she was approved. This is the way it usually works:

*Pre-qualified:

Verbal info wife provided--total income (ex. salary, SS, pension, 1099 income, court-ordered alimony/child support) and debt (ex. CCs, loans, child support) are considered when one first applies. 

*Pre-approval:

Mortgage scores first, then request for check stubs, W2, 1099, bank stmts, tax transcript, funds to close, DTI determined, other info can be requested. 

*Approval with conditions:

Appraisal

Clear title

*Approval:

Settlement--Loan closed 

So, it appears wife was only pre-qualified. Also, please note, most Realtors won't show a prospective buyer homes who only has a prequalification. 

[Anonymous]

Hi,

Well update we already were allowed to search for homes and check out some homes.

In the mean time we had a second opinion and it seems you guys were right this lender was stating her DTI was too high and nearly cut off half off the mortgage loan we got from the first lender. Not sure of the difference between two or if the first lender didnt factor the debt at all?

What sucks is that she got another hard inquiry and I thought during the 3-4 weeks of first inquiry during house hunting would cover other hits during that time period. Pissed off it was another hit.

Now we not sure if the first lender is getting different information and when the process continues it will come back to bite us.

Really wish I could be added but I have to wait until at least I hit 2 years after my bankruptcy chapter 7. I filed August 2018 and discharged December 2018. Which one they look at for 2 years? Still have 0 debt and income is higher too.

Not sure to continue and maybe the 2nd lender was too harsh or not.

Should we try for USDA loans? Area is eligible and income is for her too. Credit score is high 700s almost 800. Would we hit the same snag on DTI?

[Anonymous]

Hi,

So found my answer about USDA loans so that is no on the areas we like.

We will be trying a new lender and giving it 1 more shot and properly ask questions to make sure the loan amount is correct.

I have another question but its not related to this thread main question so I will close this thread if I can.

[VALoanMaster]

---

@Anonymous wrote:

Hi,

So found my answer about USDA loans so that is no on the areas we like.

We will be trying a new lender and giving it 1 more shot and properly ask questions to make sure the loan amount is correct.

I have another question but its not related to this thread main question so I will close this thread if I can.

---

If you want to drop your income & debt numbers here, I'll run your ratio calculations for you to see where you stand.

[Anonymous]

Update I worked with another lender and thought the ball was rolling on our side finally.

Had added income with official contract for the past year. No mention it was a problem.

Wife score is 800 and based on checks the past months its based off salary of over 90k with added income.

DTI 10-17% depending on leased car payments left is below 10 months.

Found a house we shot for it. Paid inspection sellers agreed to fix whats found and on contract.

Paid attorney and signed contract sent over to lender. Bank appraisal was paid recently.

Original loan stated 3.1% FHA with 3.5% down and total closing costs/fees including half the year property taxes paid up front so were like 5-6% of house (crazy is this normal). 3.5% down check already sent and looks like total closing costs 5-6%.

Now last minute lender stated cant count on the added income or OT since it hasnt be 2 years. Now last minute when we ask from the start and now if nothing goes thru we out $2500 for nothing.

Lender is going to find out more info.

We are pissed off right now we already was hoping for a closing date middle of July to take advantage of low rates now.

I dont even know what to do... my chapter 7 bankruptcy doesnt hit 2 years until December of this year if going by discharged or filing date was August of this year. The income wouldnt even be an issue now if i can be added and I have 0 debt also plus combined our income would of been way above 120k.

Am I really screwed until January to apply? Is chap 7 on my name and scores around 690-700 will jack up rates way above her 3.1% on her clean 800 score and 90k supposedly income and low DTI? (3.5% down FHA)

So frustrating.... now I am afraid the downpayment check cant be retrieved if this falls thru but its not like we backed out...

[VALoanMaster]

Hi @Anonymous ,

Wow that really sucks. Unfortunately you found a LO willing to tell you what you wanted to hear instead of the truth.

The truth is, a lender will only exclude a lease payment if it isn't big enough to impact your ability to make the mortgage payments & if you can prove that you have another vehicle to replace it. Once the lease is up, most people have to replace the vehicle which means either a new lease or a new car loan hence why they won't exclude the payment unless you can prove you don't need another car.

FHA will only count OT with under a 2 year history if the underwriter can document it has been consistent for at least the last 12 months & it is reasonably likely to continue. The only way an underwriter can be sure the OT is likely to continue is if the employer says so on the written verification of employment (VOE).

A good LO would have told you this upfront & they would have requested a VOE before sending you out with a pre-approval.

Your current LO is either inexperienced, bad at their job or they out right lied to you.

There is no way you can you go on the loan before the 2 year mark unless you can prove your BK was the result of extenuating circumstances outside of your control.

Get a 2nd opinion from another lender before it's too late to switch.

[Anonymous]

I will find another lender but in the mean time this lender is trying to see what we can do.

Suggested FHA and putting closing costs to loan to have a higher downpayment.

Another suggestion my wife made was to use some of the downpayment to pay down her loan to where its less than 10 months left so it doesnt get counted to lower her DTI.

Is this possible to do or thats only for auto loans if loan is less than 10 months left on loan?

It will significatly lower our total cash towards house but if we can move closing costs to loan and lower DTI will it work now that her income is way lower due to not counting extra income we thought was okay?

Just to summarize they brought it down from 90k to 55k salary and debt now is about $1300 monthly. If payoff loan is less than 10 months then it wont be counted right so that brings it down to $550 debt. If I take over her lease car *which has less than 10 months left* that brings it down to about $50 debt from cards. This path will take our total 30k cash to 18k total.

Would this work and stay in tact for the house by middle July closing?