About to close on our first home...having lender problems.... (stucco, appraisal)

[prettys13]

Hello all,

My husband and I decided a few months ago we wanted to buy a house in New Port Richey, Florida, instead of rent. The idea came to us after looking at a rental property that was $1,300/mo. Everyone we knew kept asking us why would we pay that in rent when we could just buy a house and have cheaper mortgage?

So we found a realtor and broker and have been working with them for almost 2 months. We found out my husbands credit score was not the greatest at a 613 but his dept to income is very good since we have no credit cards or other loans other than his student loans (which he pays off early or on time)

Well, our team told us we were pre approved (not qualified) for a loan of $240,000. My husband makes about $77,000 annually on his income alone. I don't work but I dabble in photography on the side.

So we looked at houses at and under $220,000 and fell in love with a certain house.

We offered full price but seller pays closing cost and seller accepts. We put a check of $2,000 down to be active with contract. Here are the stats:

-Year built: 1991, stucco block home
-Asking price: $199,000
-3 bedroom
-2.5 bath
-3 car garage
-pool/spa
-outdoor kitchen
-remodeled kitchen
-sits on a quarter acre land
-great landscaping
-Turn key

The house is in perfect shape, move in ready. We got an appraisal on the house and it appraised for $201,000 and it also passed inspection.

We are first time home buyers and are very new to this sorta thing. Now this entire time we thought we were good to go with the lender. I kept asking our broker if we are ok with everything, if we have the green light to go forward with the appraisal, inspection and so on and if we were going to have any problems getting a loan....she says no.

Our closing date is set for June 29th 2012. We have been AWC for 1.5 months. We get an email on May 22nd from our broker saying this:

"Well, I have obtained a denial from the u.w. manager. Don't give up yet; I am speaking to a few more lenders to see if they will approve and have the option of considering conventional in leau of FHA, as well."

We found out we got declined because the lender is confused on my husbands pay with the commission. We found a way to fix it, changed some wording and now its understandable. Our team thinks we have a good shot this time because in theory, there is no reason to deny us. But they also said that last time..

Now, there are some issues with my husband that we feel might be slowing us down...he has only been at his job for a year, and making the good money since December. What he does is he reconditions cars for dealerships...not detail work like cleaning and vacuuming, but repairing rips, stains, burns and so on making them look brand new. His pay has base pay of $2,000 every pay period (bi weekly) and he gets commission and brings home each month between $5-$7k.
We did, however, notice in the past 1.5 months of paying his student loans, our credit went from a 613 to a 618. He made a payment two weeks early two weeks ago, so we are hoping in the next few days our credit will be at least a 620 and some of these problems will go away....

We are worried that if we don't get a lender to approve us, we wasted our time and money on what we thought was our dream home. My questions are, how can people pay money out of their pocket for appraisal/inspection before actually having a loan? How can my realtor/broker continue with the process if we A) had any red flags or B) didn't get the loan? Also, since we got declined, do we still have a chance at getting a lender to accept us? Was it the amount they are worried about?

I am 26 years old and my husband is 23. I am starting to feel like my mother was right when saying 'why would anyone give a loan to two snot-nosed kids when doctors and lawyers are getting declined'

Is there someone who can reassure me? Is there anything we can do? Is our team doing anything shady or illegal? CAN lenders get away with this?! PLEASE HELP!

[FalconheadWest]

If he's only been at his job a year, they're not going to count his commissions and bonus. They should only count his base salary and they should have pre-approved you from the beginning on only that amount. His credit score is also an issue, but some lenders will give exceptions if the rest of the package is good, but the rest of your package, as you've explained it above, is not good. For commissions to count, you need to show 2 years of consistent commissions, otherwise, it's only your base salary that is guaranteed...

[prettys13]

Our broker is someone who works specifically with individuals who have not so good credit. She said if we get our credit score to a 620, we would have a bigger range of lenders to work with. The only thing saving our asses right now is his almost non existent debt to income and paycheck stubs stating he makes what he does.

What I don't get is, our team has known all our information, pay, credit and history since day 1. Why would they lead us on with these hopes and dreams with a $200,000 house if we can't afford that off of his salary? Its only wasting our time, the sellers time and their time. Doesn't make sense to me.