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So, we got easy pre-approval based upon income for a new home but I have two mortgages on the home i am selling, neither HAMP and both lender initiated. No lates on main mortgage ever and a few on the small one (while mod process was going on and all over 12 months ago). show as non-hamp mods on credit report. The mod on the small one reduced my rate, the mod on the large one moved me from interest only to interest and principal so my payment has actually gone up.
As long as I sell the current house, does anyone know if the mods or old lates will prevent me from getting a new loan, specifically FHA?
60 once, 30 once, both during mod proces as they advised me. like i said i am completely clean for the last 13 months on both and never reported late on first
I think you'd have a chance, but they may also require you wait 3 years from the loan mod. I don't have experience with this exact situation, but the reason you may have to wait 3 years is because if this was a short sale and you were late on the mortgage, then you'd need to wait 3 years since FHA considers it the same severity as a foreclosure. But it wasn't a short sale, it was a modification, so that is where there could be some leeway on that guideline.
There are HUD guidelines and then there are investor guidelines. You need a lender that "underwrites to the DU." "DU" stands for Desktop Underwriting, our automated approvals we obtain from an underwriting program. Lenders that underwrite to the DU, won't have any additional requirements. However, there are more lenders out there that have overlays, or additional requirements than what is in the HUD guidelines. And just because you get the DU approval, doesn't mean the underwriter is going to rubberstamp it.
You say 12 months ago. Does that mean exactly 12 months ago, 13 months, or 18 months? Are there lates anywhere else? Will your payment be increasing by a lot? (To the amount before modification?) Will you be pushing your ratios? How much cash will you have in the bank after closing? Work history strong......and so on, you get the idea. If the lates on the 2nd is the only issue, you have a better chance than if you have multiple issues.
Unfortunately, your pre-approval is worthless until an underwriter has reviewed your file and most lenders are not putting files before underwriters unless there is contract on a home. There are still lenders out there that will submit your credit file to an underwriter for a true pre-approval. I recommend you find one before you sell your home and wind up under contract on a home that you may not be able to obtain financing for. Unfortunately, the industry's high rate of declines reflect we have far too many loans getting put on the books that never should have gotten past the loan officer. (Many follow the logic, "throw enough against the wall, some will have to stick. Make sure that's not your loan officer's logic).
Our industry has returned to more gray tones than black and white. This is exactly why you want someone that has experience.
^ a few old late cc payments, payment going up 650/mo, income now 4x what it was and should have 2-2.5 years of expenses in bank after closing.
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