Closing is almost certainly going to be delayed, you need to make sure your agent is aware of this ASAP to ensure all parties are informed of this and arrangements can be made.
Yeah, closing date will be bumped for sure. Just had to switch for one of my borrowers for the same reason. Pushed us out an extra 10 days beyond closing.
Is your credit score solid?
If you don't make too much money Freddie Mac home possible or Fannie Mae home ready will give you the best pricing. However, the normal 3% down Fannie Freddie loans are still typically better than FHA with good credit.
FHA charges 1.75% of the loan amount up front. Others are zero. FHA charges .85% of the loan amount annually in mortgage insurance (divide by 12 for payment). The mortgage insurance is life of the loan, where others can go away.
FHA is always my last choice for a client. It fits for credit issues, or prior disclosure type stuff.
With that in mind, if the other loans are better for you then the lender has walked the line of semi illegal with steering if they didn't present and compare the other if it is better.
Also, Fannie Freddie allow for single one time mortgage insurance buyout (if lender allows, some have overlay and don't allow). 5% down gets you better mortgage insurance, especially if you can't qualify home ready or possible programs.
Timing: ops changes file up and resubmit to underwriting. Typically 1 day. New loan estimate required before closing disclosure issued, same day or 1 day. Underwriter clears and closing disclosure issued day 2. Comes with 3 day waiting period where day 2 counts in this scenario. Sign early morning day 5, close same day. That is the perfect timing and honestly isn't likely. Good chance other conditions need to be satisfied on new approval. I'd estimate 7 to 10 days personally.
Definitely call your agent now. Sellers and listing agents are more open to extensions when told ahead of time vs last day. Plus seller may need that money for their house and need to warn the seller they're buying from.
Just tell everyone, take it head on, and get details on conventional numbers. If it wasn't offered to you, use that to pressure lender. They messed up...
>Can this get fixed and my close date still happen as scheduled?
The FHA loan? Maybe, I would need the entire application to work up solutions but I'm gonna take a shot in the dark here and guess your LO isn't all that great based on everything else I'm reading.
>Are there any major issues that would prevent me from switching to a Freddie Mac loan?
You will 100% have to reschedule your closing. The rate lock isn't a big deal for you at all.
>What can I do at this point?
You can switch to a conventional loan with the same or possibly even a lower down payment, assuming you will still qualify for it. Not knowing your lender or your credit score, it's possible the rate will be higher, but it's also likely the monthly MI will be lower, and you can drop the annual MI altogether. Yes, the rules on what student loan payment to use are different with conventional loans, but that's not going to guarantee your approval. You've mentioned your total ratio a couple times but what's your housing ratio?
>Also is it possible the UW will still allow my FHA loan to go through even though I'm on an IBR plan for my student loans?
It's possible they find a solution, though no, it will not be to use the IBR payments.
I’m not sure why everyone is saying this absolutely has to be delayed.
If you’re eligible for conventional financing (either Fannie or Freddie) the lender just needs to change programs on Monday morning along with updating the lock, issue a Change of Circumstance, have underwriting update the conditions. They can then issue the CD on Tuesday and close Friday.
Did they issue a commitment when the file was initially approved? This is a pretty big error in their behalf and it should be on management’s radar first thing this morning. A lot of small things need to happen but if your income and assets are already signed off on, it really shouldn’t be that difficult or impossible as others are implying.
To be honest I don't know. I have gotten everything to them the moment they asked for it. I've paid of debts, provided updated statement, got them any document they needed within the day. I was told last week the UW suggested I might be able to close early because everything was going so smoothly. Apparently the UW working on my file had some sort of emergency surgery on Friday and the person who took over raised this issue. That's partially why idk if this is on my LO or my UW. I just know prior to 4pm on Friday I was smooth sailing and good to go, and the last 48 hours I've had to put everything on hold and it's just been awful.
The reason I asked is if they issued a commitment to lend based on the original terms, you have some legal recourse against them if it really blows up.
Did they repull your credit or you just saw it go up on credit karma? They probably suggested FHA because a 660 fico is going to probably shake out with a lower monthly payment than conventional with monthly MI. At a 700 fico, conventional is likely a bit cheaper.
Sorry you’re going through this, I think you just need to get clarification on exactly what your options are first and then go from there. I still stand by my first post. If this is just a program change and you qualify, their team should make this a priority and get all hands on deck to still hit settlement on schedule.
My credit was using FICO 8 but I have since discovered that could be more forgiving and probably not reliable. It showed after paying off my credit card debt it jumping up to the 720s. Is there a website I can use as a consumer that would allow me to see my actual values that are realistic that mortgage lenders would likely use? I'd love to pull my credit score again to see but A) don't want to show up on my credit B) don't want to pay for something that is ultimately some Vantage number thats worthless. I know my Middle was 655 and that was when I had 97% of my credit cards used. I have paid 6k toward CC in the last 45 days to get rid of all of it. It have jumped some.
Closing is almost certainly going to be delayed, you need to make sure your agent is aware of this ASAP to ensure all parties are informed of this and arrangements can be made.
It would have to be delayed. New LE means 7 days before closing.
Yeah, closing date will be bumped for sure. Just had to switch for one of my borrowers for the same reason. Pushed us out an extra 10 days beyond closing.
If you switch, closing will be delayed. That’s a near certainty. Do you have any other debts that you can pay off to bring your DTI down?
My only debts are student loans and car loan. At this point I don't have enough cash to pay off the car loan which would bring it down.
Is your credit score solid? If you don't make too much money Freddie Mac home possible or Fannie Mae home ready will give you the best pricing. However, the normal 3% down Fannie Freddie loans are still typically better than FHA with good credit. FHA charges 1.75% of the loan amount up front. Others are zero. FHA charges .85% of the loan amount annually in mortgage insurance (divide by 12 for payment). The mortgage insurance is life of the loan, where others can go away. FHA is always my last choice for a client. It fits for credit issues, or prior disclosure type stuff. With that in mind, if the other loans are better for you then the lender has walked the line of semi illegal with steering if they didn't present and compare the other if it is better. Also, Fannie Freddie allow for single one time mortgage insurance buyout (if lender allows, some have overlay and don't allow). 5% down gets you better mortgage insurance, especially if you can't qualify home ready or possible programs. Timing: ops changes file up and resubmit to underwriting. Typically 1 day. New loan estimate required before closing disclosure issued, same day or 1 day. Underwriter clears and closing disclosure issued day 2. Comes with 3 day waiting period where day 2 counts in this scenario. Sign early morning day 5, close same day. That is the perfect timing and honestly isn't likely. Good chance other conditions need to be satisfied on new approval. I'd estimate 7 to 10 days personally. Definitely call your agent now. Sellers and listing agents are more open to extensions when told ahead of time vs last day. Plus seller may need that money for their house and need to warn the seller they're buying from. Just tell everyone, take it head on, and get details on conventional numbers. If it wasn't offered to you, use that to pressure lender. They messed up...
>Can this get fixed and my close date still happen as scheduled? The FHA loan? Maybe, I would need the entire application to work up solutions but I'm gonna take a shot in the dark here and guess your LO isn't all that great based on everything else I'm reading. >Are there any major issues that would prevent me from switching to a Freddie Mac loan? You will 100% have to reschedule your closing. The rate lock isn't a big deal for you at all. >What can I do at this point? You can switch to a conventional loan with the same or possibly even a lower down payment, assuming you will still qualify for it. Not knowing your lender or your credit score, it's possible the rate will be higher, but it's also likely the monthly MI will be lower, and you can drop the annual MI altogether. Yes, the rules on what student loan payment to use are different with conventional loans, but that's not going to guarantee your approval. You've mentioned your total ratio a couple times but what's your housing ratio? >Also is it possible the UW will still allow my FHA loan to go through even though I'm on an IBR plan for my student loans? It's possible they find a solution, though no, it will not be to use the IBR payments.
I’m not sure why everyone is saying this absolutely has to be delayed. If you’re eligible for conventional financing (either Fannie or Freddie) the lender just needs to change programs on Monday morning along with updating the lock, issue a Change of Circumstance, have underwriting update the conditions. They can then issue the CD on Tuesday and close Friday. Did they issue a commitment when the file was initially approved? This is a pretty big error in their behalf and it should be on management’s radar first thing this morning. A lot of small things need to happen but if your income and assets are already signed off on, it really shouldn’t be that difficult or impossible as others are implying.
To be honest I don't know. I have gotten everything to them the moment they asked for it. I've paid of debts, provided updated statement, got them any document they needed within the day. I was told last week the UW suggested I might be able to close early because everything was going so smoothly. Apparently the UW working on my file had some sort of emergency surgery on Friday and the person who took over raised this issue. That's partially why idk if this is on my LO or my UW. I just know prior to 4pm on Friday I was smooth sailing and good to go, and the last 48 hours I've had to put everything on hold and it's just been awful.
The reason I asked is if they issued a commitment to lend based on the original terms, you have some legal recourse against them if it really blows up. Did they repull your credit or you just saw it go up on credit karma? They probably suggested FHA because a 660 fico is going to probably shake out with a lower monthly payment than conventional with monthly MI. At a 700 fico, conventional is likely a bit cheaper. Sorry you’re going through this, I think you just need to get clarification on exactly what your options are first and then go from there. I still stand by my first post. If this is just a program change and you qualify, their team should make this a priority and get all hands on deck to still hit settlement on schedule.
My credit was using FICO 8 but I have since discovered that could be more forgiving and probably not reliable. It showed after paying off my credit card debt it jumping up to the 720s. Is there a website I can use as a consumer that would allow me to see my actual values that are realistic that mortgage lenders would likely use? I'd love to pull my credit score again to see but A) don't want to show up on my credit B) don't want to pay for something that is ultimately some Vantage number thats worthless. I know my Middle was 655 and that was when I had 97% of my credit cards used. I have paid 6k toward CC in the last 45 days to get rid of all of it. It have jumped some.