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Hi, we are currently in underwriting and I am living on a combo of tums and coffee. Can anyone tell me if we have a good chance of being approved?
Pre-approved in mid Dec. Put in an offer for a $375K house. Will put 15% down and mortgage about $323K in a 10/1 ARM with a rate of 4.375. Currently under contract with 3/1 close date.
My income is $73K per year and my partners is $89K. Both teachers with 5+ years at current positions. I also work night school for an additional $30K a year but didnt include that on the application because it is not a part of my contract/salaried position.
Her credit is 790. About $55k in student loans, car payment of $12K (200/month) remaining, and under $3K in credit debt.
Mine is the problem area. Credit is 625 as of 12/14. Since then, has gone up on credit karma, credit sesame and other sites I monitor (I know they arent official but increasing is increasing, right?) but they are didnt re-run the credit for the official application. I owe $47K in student loans and about $5,500 in credit debt. I have a few late payments, mostly from 2013 and 2014 and one from last October. I had a balance of $4500 with the IRS from 2012 and 2013 which I recently paid off in full. I also have one chargeoff for $2200 which I have not touched on the advice that it would cause it to become current and potentially lower my score.
As I said, we were preapproved and I was up front about my low credit. We submitted the application, the appraisal came back, we gave the loan processor everything they requested ASAP, and we were sent to the underwriter this afternoon.
I am trying to think positive but I am so nervous. I am hoping that my bad credit from my 20s (crappy job + bad decisions) doesnt cause us to get denied.
They pulled credit and gave you a pre-approval letter?
Did they also collect and inspect paystubs/W2s/Tax Returns?
How old is your Loan Officer and how long have they been in the business?
What company is it?
How did you vet them prior to matriculating?
There are significant differences in the manner in which lenders provide pre-qualification and pre-approval letters. If you decided on a seasoned company with seasoned employees who inspected financials, and plan to update your credit (no fee to you), prior to Locking, so as to ensure optimal terms, you should be fine.
If you didn't, and don't know what they did prior to issuing the letter, than it might be a little flimsy.
They pulled credit and gave you a pre-approval letter? Yes to both.
Did they also collect and inspect paystubs/W2s/Tax Returns? Yes. Last 2 paystubs of 2018, first of 2019, W2s from 2016, 2017, and we just sent over 2018. Signed a release for then to retrieve tax return transcripts for 2016 and 2017.
How old is your Loan Officer and how long have they been in the business? Our load originator is mid 30s and has been with the credit union for 12+ years.
What company is it? Teachers Federal Credit Union. Based in Long Island, NY
How did you vet them prior to matriculating?We went to 4 different places. A bank, two credit unions, and a mortgage broker. TFCU made the most financial sense for us. We also like our LO. She was knowledgable, no-nonsense, and didnt try to "sell" us on her product, or talk a load of crap about the other options we were considering. The other places all immediately began to tell us what was wrong with the other places. Most of what they said didnt seem to hold much weight. I guess you could also say we went with our gut.
We were pre-approved and not prequalified. I am clear on the difference and I am sure. The pre-approval was underwritten before the official letter was issued. Does that sound pretty solid?
I'll preface this by saying I'm a mortgage loan processor. I submit files for underwriting review and work with underwriters to get all conditions cleared prior to closing, so I'm pretty familiar with the whole process. That didn't stop me from being nervous as heck during my own purchase, so I totally get how you're feeling and it's perfectly natural.
You can get a loan with a 620+ credit score. However, no one on the forum is going to be able to tell you if you qualify without knowing your monthly liabilities - this is ONLY what appears on your credit report, so student loan and auto payments, credit cards, etc. We need that to calculate your DTI (debt-to-income ratio). Also need to know taxes and insurance on the house you're buying to estimate your projected monthly house payment.
On your income, how long have you had the night school job? If it's over 2 years, you can use that income as well, and your loan officer should've told you that if your DTI is borderline for qualifying. But it may not have been a concern - hard to say without knowing your liabilities.
Now, there are mortgage brokers who will use underwriting to do their qualifications for them. I personally hate that; qualify your clients and don't leave them blowing in the wind. Use underwriting as a step toward closing a loan you know is viable, not to just throw things at the wall to see if they stick. But that's my rant - doesn't really answer your question.
Assuming your loan officer is the type who does his due diligence to qualify his clients up front and run automated underwriting to confirm that, he would not gather all your documents and submit your file for underwriting review without being relatively certain you're going to qualify for the loan. If he's spent time with you in person or on the phone, asked detailed questions, and reviewed your credit report in detail, I'd advise you to try not to worry. Underwriting can take anywhere from a day to a week or more. For the sake of your poor stomach, I hope it's on the shorter end!
When your loan officer or processor hears back from underwriting, it's likely you'll be asked for some more documentation. Don't take that as a bad sign. It's very common. You're working to get "cleared to close," which means underwriting doesn't need any further documentation and you're approved to sign closing docs and get your house. I would say they're working on a very reasonable timeline. With a 3/1 closing, being in underwriting now gives them plenty of time to collect any further documentation needed.
Fingers crossed for you! I hope you get an underwriting response soon.
They pulled credit and gave you a pre-approval letter? Yes to both.
Did they also collect and inspect paystubs/W2s/Tax Returns? Yes. Last 2 paystubs of 2018, first of 2019, W2s from 2016, 2017, and we just sent over 2018. Signed a release for then to retrieve tax return transcripts for 2016 and 2017.
How old is your Loan Officer and how long have they been in the business? Our load originator is mid 30s and has been with the credit union for 12+ years.
What company is it? Teachers Federal Credit Union. Based in Long Island, NY
How did you vet them prior to matriculating?We went to 4 different places. A bank, two credit unions, and a mortgage broker. TFCU made the most financial sense for us. We also like our LO. She was knowledgable, no-nonsense, and didnt try to "sell" us on her product, or talk a load of crap about the other options we were considering. The other places all immediately began to tell us what was wrong with the other places. Most of what they said didnt seem to hold much weight. I guess you could also say we went with our gut.
We were pre-approved and not prequalified. I am clear on the difference and I am sure. The pre-approval was underwritten before the official letter was issued. Does that sound pretty solid?
I cannot imagine better answers!
Inasmuch as can be determined here, I really truly believe you did a great job with this process and will be fine. In fact, your diligence and actual care about the process are informing your doubt because you know how this works.
Nobody is really fully Approved until the wire has been released and the Deed has been recorded, but I cannot see how you can possibly be declined.
The LO was confident that we were in good shape. I've worked night school for 3 years. She said on several occasions that our combined income was high enough even without it, so I did not push the issue.
I dont have a ton of debt other than student loans and minimal credit debt. My car is paid off. My monthly st.loan payment is $630 and I generally pay anywhere between $500-1500 towards credit cards. That isnt the minimum payment, thats me trying to pay them off faster.
Taxes on the house are $8500/year. We were approved for PMI at $115/month.
I did a monthly calculator of my DTI and I was at 37%. Not sure how correct my calculations were though.
Again, she thought we were ok. It went through underwriting before we got the preapproval. I also have a bad habit of googling every worst case scenario possible, so I am probably overanalzying and driving myself crazy.
I just spoke to the LP and she said it was at an actual physical underwriter. Does that sound accurate?
I know the preapproval went through underwriting before it was approved. Would that have been the AUS approval?
Loan officers don't always use AUS to issue a preapproval. Some files are pretty straightforward, and a seasoned loan officer won't need to run AUS to give a confident preapproval.
AUS is typically used in combination with a human underwriter. Most loan programs require, for example, "a DU Approve/Eligible," which means an approval by Fannie Mae's automated underwriting program. So if your loan officer didn't run the file through AUS, the human underwriter will at some point.
Anyway, I do think it sounds like your LO knows what she's doing, and you probably have a solid file. I look forward to hearing when you get your underwriting approval.
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