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This is my first ever post to this forum. My wife and I have been looking for homes for a long time. We found our dream home and started the application in June. We received a pre-qualification from the in house lender (new build) but we were told we could not qualify for a conventional due to student loan debt. I know new regulations about student loans went into effect on 09/14/15 but we are "grandfathered" in on the previous deferment guidelines if everything I am reading and was told by the loan officer is true. We asked the loan officer if we should be worried about getting the loan back in June and she replied as long as we could prove my student loans are deferred for more than a year, we should be fine because we are great everywhere else.
Some details about our situation:
--Credit Score: ~780 (we were told for FHA that's really high)
--Student Loans: ~$115K (I am in a doctoral program and will be done in 2017). Have a letter from the lender that says we are deferred until June 2017.
--Credit Cards: $0
--Other Loans: 1 car payment $250 with about $6K remaining
--Income: $6,667 a month gross ($80,000 base) and bonus eligible to $8K additional
--Loan Type: FHA AZ Home-In-5 (down payment assistance program)
--Only other factors that we could even foresee: We had one late payment on a mortgage payment (30 days) in June 2013 (seven years prior always on time). Also we were in "credit card full court press" when we started the process. All money we were putting in debts and we paid them all off before applying. But one of the months our line of credit was pulled to cover an expense that prevented a negative balance (my bank does not charge an overdraft fee). We have money in the bank now, but at the time we were focused on zeroing out the credit cards, which we had done before starting the process.
We have been in underwriting now for 2 months! At the beginning of the month I emailed my loan officer for a status. She said they are extremely backed up and haven't even looked at it yet. My wife and I are natural worriers. We don't know what we will do if our loan is declined. I guess I am just looking for someone who understands loans to let me know if this delay is normal? Is there anything in the information I have provided that we need to be seriously concerned about? Please only serious responses. Thank you all!
Take your application to another lender. Sounds as though your current loan officer is not able to get the job done. It should NEVER take that long to get an approval regardless of your circumstances. Given the info you provided this appears to be a problem on the loan officer side, not on your qualification.
Try some mega-lender like Quicken Loans. Multiple credit pulls by mortgage lenders does not hurt your score. System knows you're shopping. Also, are you home shopping in a metro area or out a bit? One very attractive lending program comes from the USDA if it's in more rural areas. Type USDA eligibility in your browser and you can find the web site which spells out the program (Use the USDA site, not the site of a specific lender). The web site spells out both specific property and individual income eligibility.
USDA mortgage insurance premium is less than half that of FHA and it provides financing for 100% of property value instead of the 96.5% of FHA.
We've looked at homes and found USDA eligible areas in Florence, Green Valley, Eloy and other locations in and around the (Phoenix/Tucson) areas .
This is my first ever post to this forum. My wife and I have been looking for homes for a long time. We found our dream home and started the application in June. We received a pre-qualification from the in house lender (new build) but we were told we could not qualify for a conventional due to student loan debt. I know new regulations about student loans went into effect on 09/14/15 but we are "grandfathered" in on the previous deferment guidelines if everything I am reading and was told by the loan officer is true. We asked the loan officer if we should be worried about getting the loan back in June and she replied as long as we could prove my student loans are deferred for more than a year, we should be fine because we are great everywhere else.
Some details about our situation:
--Credit Score: ~780 (we were told for FHA that's really high)
--Student Loans: ~$115K (I am in a doctoral program and will be done in 2017). Have a letter from the lender that says we are deferred until June 2017.
--Credit Cards: $0
--Other Loans: 1 car payment $250 with about $6K remaining
--Income: $6,667 a month gross ($80,000 base) and bonus eligible to $8K additional
--Loan Type: FHA AZ Home-In-5 (down payment assistance program)
--Only other factors that we could even foresee: We had one late payment on a mortgage payment (30 days) in June 2013 (seven years prior always on time). Also we were in "credit card full court press" when we started the process. All money we were putting in debts and we paid them all off before applying. But one of the months our line of credit was pulled to cover an expense that prevented a negative balance (my bank does not charge an overdraft fee). We have money in the bank now, but at the time we were focused on zeroing out the credit cards, which we had done before starting the process.
We have been in underwriting now for 2 months! At the beginning of the month I emailed my loan officer for a status. She said they are extremely backed up and haven't even looked at it yet. My wife and I are natural worriers. We don't know what we will do if our loan is declined. I guess I am just looking for someone who understands loans to let me know if this delay is normal? Is there anything in the information I have provided that we need to be seriously concerned about? Please only serious responses. Thank you all!
Backed up? That is strange. Down Payment Assistance loans tend to carry a hard 45% Total Debt Ratio limit. What is the purchase price of the home, and how much are the property taxes?
Things are definitely busy, but two months is over the top. You don't say when your home will be completed, but Reg B requires the lender to issue an underwriting decision within 30 days of loan application. You appear to be into the rules, you can get all of Reg B here:
files.consumerfinance.gov/.../201306_cfpb_laws-and-regulations_ecoa-co...
The problem with builder loans is your purchase is tied to using them. That would be fine if they provided their own money to fund their own loans, but they don't. They use the money Wells puts out, or half a dozen other lenders. Your builder's mortgage company is bound to their rules. Fortunately, there are still pure Ginnie Mae lenders out there that underwrite to FHA specific requirements that they can send your loan to. This could be the reason for the delay, they just do not know who the investor on your loan will be.
When FHA issues guideline changes, its based on the date the FHA case number is assigned. Typically, that is also when the appraisal is ordered, and they are only good for a limited period (so they couldn't order it in April for a September closing). What you need to find out is if your case number was issued and the date it was issued. If your loan officer won't tell you, tell her you will call HUD or the CFPB and get the information through them. Go read Reg B.....knowledge puts you in control.
Do you know whether the FHA Case Number was pulled? If it wasn't assigned by the deadline, then you are bound to the new guidelines. Ask that question first. Assuming that there is an FHA Case #, then it's up to you whether you want to proceed with the in-house lender. Two months is over the top in terms of processing/underwriting. You should know the status and it's inexcusable that you wouldn't know exactly where you stand. When will the home be completed?
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