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We went to a credit union for a mortgage pre-qual. Everything was fine, supposedly the criteria is to use my husband's credit rating and we asked for up to $60K. Mortgage interviewer said everything was good for 4.25 with 1% origination. This is an investment property.
We had some questions about structuring the purchase but when we got all agreed on, contacted the cu again to make sure everything was ok and were told the mortgage was now being handled by a branch manager not the loan officer. Again, everything was fine.
Submitted all docs and tried to move this along (seller is being a pita and wanted it done in 3 days) and just got an email from mortgage dept at that branch that they are using a 200 pt lower credit rating - joining his and mine and taking the lowest of my scores and therefore the interest rate will be higher and another 1/2 pt origination.
WTF? We checked with manager and he said now suddenly my husband's income and dti is not sufficient to warrant the lower.
Are they on drugs? We have more than enough in savings to buy the damned property outright (but because it's a rent to own investment - we own, rent to current tenant who will buy from us), we are not willing to deplete our savings that much.
I'm on my way to a local bank to see if they can offer us anything better.
We have had our suspicions about this "transfer to the bank manager" from the mortgage dept and this seems to confirm it for us.
We went to a credit union for a mortgage pre-qual. Everything was fine, supposedly the criteria is to use my husband's credit rating and we asked for up to $60K. Mortgage interviewer said everything was good for 4.25 with 1% origination. This is an investment property.
We had some questions about structuring the purchase but when we got all agreed on, contacted the cu again to make sure everything was ok and were told the mortgage was now being handled by a branch manager not the loan officer. Again, everything was fine.
Submitted all docs and tried to move this along (seller is being a pita and wanted it done in 3 days) and just got an email from mortgage dept at that branch that they are using a 200 pt lower credit rating - joining his and mine and taking the lowest of my scores and therefore the interest rate will be higher and another 1/2 pt origination.
WTF? We checked with manager and he said now suddenly my husband's income and dti is not sufficient to warrant the lower.
Are they on drugs? We have more than enough in savings to buy the damned property outright (but because it's a rent to own investment - we own, rent to current tenant who will buy from us), we are not willing to deplete our savings that much.
I'm on my way to a local bank to see if they can offer us anything better.
We have had our suspicions about this "transfer to the bank manager" from the mortgage dept and this seems to confirm it for us.
Are we wrong in our thinking?
Without specific income/liabilities data, it's difficult to say, but it doesn't sound like the Credit Union staff is ingesting drugs, at least during work hours, or in their interaction with you. Could be any number of things: Does your husband's pay involve bonus, commission, self-employment? Are there significant losses in other schedules (E?), does he pay child or spousal support? How is his pay calculated?
I'm thinking the LO made a mistake, which, at times, humans do, even when sober.
The notion that you "could buy the home outright" indicates a strong Reserves position, but that does not affect debt ratio. BUT - you likely have plenty of time to execute account paydowns that might well improve your score, and thus terms.
No accounts with balances - all paid off in full as soon as the month closes. We are both retired. I am on SS, he is on govt pension and bridge payment. His SS begins in 8 months at which time our income will increase.
Liabilities: I have a new car loan under $400/month, 1 year old never late.
His credit scores are in the high 700s to low 800s. My credit scores are low to mid 700s. I have 3 credit cards, he has 4. 2 of mine have zero balance due to no use at all in 4 years. He uses one card once a year just to keep it and the others have a balance that will hit zero as we get our monthly statement.
Credit-building advice - get more credit cards which we are not going to do.
I put into the cu savings account every single month between $500 and $1000. We owe nothing except the car payment (at zero percent) besides monthly bills.
OK, with that information, it is strange. Can you describe what the bridge payment is? Also, you should be in very similar territory with a 700+ score. Original LO may have priced out the deal as a Primary Residence, then the manager caught it and is using income as a ruse to price it at an acceptable revenue level.
Yeh, something doesn't seem right! I think they screwed up. I would definitely go somewhere else. Stay away from the big banks (especially Wells Fargo, lol)! I've never heard of a mortgage loan closing in only 3 days.
Was this the only place you got a quote from? I ask because when we were shopping around for our mortgage, the banks had lower rates than the credit unions around us.
Bridge payment is for when the employee retires before age 62, entitled to full retirement based on years, so the govt pays a portion of the predicted social security until employee reaches 62. It's basically a pre-social security. Since govt pays so far below private industry, it's a way to keep employees, especially those who have been in the job a long time.
Actually, the LO was in the investment mortgage division and there was no doubt it was an investment. We even discussed the current tenant remaining with a rent with option and the need to have the mortgage with no pre-payment penalty.
Big banks don't operate where we live and, even if they did, no one wants to give a mortgage for under $50K.
And, yes, we only went to the one cu. Yesterday, we popped in to our bank but the loan officer (there's no dept, just a person) was on vacation. There's a regional bank we might go to if we don't get something from our bank.
There really is no risk in this - property last appraised for $150K as of last mortgage 18 months ago.
Bridge payment is for when the employee retires before age 62, entitled to full retirement based on years, so the govt pays a portion of the predicted social security until employee reaches 62. It's basically a pre-social security. Since govt pays so far below private industry, it's a way to keep employees, especially those who have been in the job a long time.
Actually, the LO was in the investment mortgage division and there was no doubt it was an investment. We even discussed the current tenant remaining with a rent with option and the need to have the mortgage with no pre-payment penalty.
Big banks don't operate where we live and, even if they did, no one wants to give a mortgage for under $50K.
And, yes, we only went to the one cu. Yesterday, we popped in to our bank but the loan officer (there's no dept, just a person) was on vacation. There's a regional bank we might go to if we don't get something from our bank.
There really is no risk in this - property last appraised for $150K as of last mortgage 18 months ago.
"Investment Mortgage Division." I bet it was a "Senior" Loan Officer. You know what it takes to call yourself a Senior Loan Officer? you have it printed on your business cards.
Talked with the local bank where we have savings and checking. He said there's absolutely nothing wrong with our credit (which we knew) and that the cu must have gotten something mixed up. Anyway, we are waiting for paperwork from our local bank to get the mortgage started and he gave us a couple options to think about to not go the mortgage route. We will think about it. I'm not keen on tying up our savings and it would mean delaying getting my kitchen redone.
House is bought -- with a personal loan secured by our savings. Mortgage itself was flowing along, inspection scheduled, but seller became irrational, calling the tenant daily and yelling about the process taking too long. At one point, she told the tenant to pack-up and get out by the end of the week.
So now we are working on a lease with option.
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