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I've been approved for an FHA cash -out refi with Ditech, however they are requiring a 3 mo reserve of $6200. I do not have it...but the equity in the house is very good. It was appraised for $405K I owe $251 and only want to borrow $318K..... $323K w/ the FHA MI prepayment requirement. credit score is 650, w/ BK in 2010, no late pays whatsoever since. 36.7% DTI....with verified income at $100K.... is there another option for me without reserves ? If I had $6200 dollars I probably wouldn't need to refi.
Why in the world would you refi FHA with equity levels like that? There must be something else wrong with your credit to not go conventional.
The lenders want you to have reserves to ensure you can pay the mortgage for a minimum amount of time if you lost your job after you closed. You "only" want to borrow $323k? That's right at the 80% mark, the most you're allowed to cash-out.
You act like you're not asking for much, but you are, and the bank has the right to ensure payback...
I've been approved for an FHA cash -out refi with Ditech, however they are requiring a 3 mo reserve of $6200. I do not have it...but the equity in the house is very good. It was appraised for $405K I owe $251 and only want to borrow $318K..... $323K w/ the FHA MI prepayment requirement. credit score is 650, w/ BK in 2010, no late pays whatsoever since. 36.7% DTI....with verified income at $100K.... is there another option for me without reserves ? If I had $6200 dollars I probably wouldn't need to refi.
Do you have a 401k/403b/IRA account? Retirement accounts can count as reserves.
I've been approved for an FHA cash -out refi with Ditech, however they are requiring a 3 mo reserve of $6200. I do not have it...but the equity in the house is very good. It was appraised for $405K I owe $251 and only want to borrow $318K..... $323K w/ the FHA MI prepayment requirement. credit score is 650, w/ BK in 2010, no late pays whatsoever since. 36.7% DTI....with verified income at $100K.... is there another option for me without reserves ? If I had $6200 dollars I probably wouldn't need to refi.
FHA Reserve Requirements kick in if DU (Automated Underwriting) failed to provide an Approve/Eligible decision. Maybe the addition of assets to the file got the Automated approval, but more likely it is due to the inability to obtain an Approve/Eligible, making the file a Manual Underwrite.
Is there one thing that Ditech mentioned that triggered a Manual Underwrite? Bk shouldn't matter at this point.
it seems it was a Ditech " overlay " requirement, since FHA loans / refi's don't require reserves. I do have a vested retirement fund worth over $130K but they are not accessible funds so don't count as reserves. I called a different lender AFC and they also found it odd Ditech required the reserves and made the loan happen. I did end up paying $800 more in fee's but that's not too bad. FHA refi was at 3.625 % which seemed good accept for the $5500 pre-paid mortgage insurance and $210 per month for 11 years on going M.I. However, a conventional loan would have been at 5% since I have a 650 FICO score ( too much credit card debt ) making the payment on $318K greater than going the FHA route by $50. I figure once I pay off my $16K credit card debt my FICO score should go up quickly and in 1-2 years I can refi again ( god willing interest rates stay low ) with a conventional loan around 4% maybe even a 15 year at 3%...you never know it could happen Thanks for the input, I appreciate it...great forum!
I am shocked that at an income of $100,00 you don't have $6,000 in reserve
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Thanks for the input, I appreciate it...great forum!
