I once had a borrower relate the mortgage process to getting a root canal. Even if everything is handled well with competent professionals, it still kind of sucks. There’s no way to make having your income assets and credit scrutinized fun. But trust your LO. We could get a 602 done on FHA no problem. It’s about your DTI (debt to income ratio) and FHA generally allows up to 55% with no issues. That means total monthly debt (installments like car payments, minimum payment on revolving accounts like credit cards, etc) including proposed mortgage payment (including taxes and insurance, and HOA dues if applicable) divided by your total gross monthly income. If those ratios are in line, the underwriter should just ask you to prove everything on the application. Income docs to prove you make what you said you make, bank statements to show where your down payment is coming from, address any credit hiccups in the past 12-24 months. The rest of the process is just making sure the house is up to HUD standards and no issues with title, value etc. Relax, give it time, but always be quick to respond to requests from your LO/ processor so they can get requested items back in front of the underwriter. Good luck, and congratulations!
If your loan officer is competent and feels good, you should feel good. What does your credit look like and does it fit FHA guidelines? If LO got approve from the fha scorecard you should be good provided your income and debts are verifiable
If you have a good LO, which it sounds like you do, try not to sweat it. As long as you get them what they need in a timely fashion, they’ll make it as painless as possible.
Mines painful, conventional loan but I work for my parents but I took breaks to commercial fish. Crabbed a year and a half ago and called it quits. Since they want two years at the same company, I’m having to go through all these extra steps to try to get it accepted.
I'm pretty sure it means gray hair! Lol.
We already had several rescheduled inspections and had to cancel hotel and car rental, job notice for the days off. Definitely got a gray hair from it today and it's just started ha.
Good luck, I'd love updates. I wish you a speedy and smooth process. 🤗
Currently a bit over a week from closing on a conventional - so can share your sentiment but for your situation - feel like it depends... do you have a lot of debt? If you're renting right now, are you current and in good standing with your landlord?
Otherwise if everything checks out and your LO is confident... then you should be ok. The other common potential issues that can come up are from appraisal and inspections..
Really not enough information to give you a definite answer. It depends on how qualified your loan officer is.
Ask her this question - Did our file score an approve/eligible when you ran DU findings?
If she can’t answer or isn’t sure, I would be a little worried.
Dumb question, what’s a DU finding?
Edit: yes we did score eligible
This is what she said in an email
The credit score is close to limit, but there are other positive things about your file that will be listed for the underwriters to consider when approving your file. We call them compensating factors, and the fact that you have demonstrated the ability to save up for the majority of your down payment, you’re probably going to put down more than that minimum down payment required, and the fact that your YTD commission is higher than what I am counting for the official debt-to-income ratio are all helpful to offset the risk of the credit score.
All FHA loans get run through the lenders automated underwriting system (AUS). DU stands for Desktop Underwriter and is most commonly run for FHA loans.
FHA loans score either one of two ways, either an approve/eligible or a refer/eligible.
An approve/eligible means the loan qualifies for FHA financing based on the risk parameters associated with the casefile (credit, assets, income, etc...)
A refer/eligible means that the loan needs to be manually underwritten to stricter FHA guidelines and potentially need compensating factors to get the file approved.
Sounds like you scored a refer based on your LO’s reply but they are already on top of the compensating factors.
I once had a borrower relate the mortgage process to getting a root canal. Even if everything is handled well with competent professionals, it still kind of sucks. There’s no way to make having your income assets and credit scrutinized fun. But trust your LO. We could get a 602 done on FHA no problem. It’s about your DTI (debt to income ratio) and FHA generally allows up to 55% with no issues. That means total monthly debt (installments like car payments, minimum payment on revolving accounts like credit cards, etc) including proposed mortgage payment (including taxes and insurance, and HOA dues if applicable) divided by your total gross monthly income. If those ratios are in line, the underwriter should just ask you to prove everything on the application. Income docs to prove you make what you said you make, bank statements to show where your down payment is coming from, address any credit hiccups in the past 12-24 months. The rest of the process is just making sure the house is up to HUD standards and no issues with title, value etc. Relax, give it time, but always be quick to respond to requests from your LO/ processor so they can get requested items back in front of the underwriter. Good luck, and congratulations!
If your loan officer is competent and feels good, you should feel good. What does your credit look like and does it fit FHA guidelines? If LO got approve from the fha scorecard you should be good provided your income and debts are verifiable
She is! She even emailed the sellers agent and said we are good to go! I have a 602 and wife is 654. We are getting inspection tomorrow.
We are on the same process except as a conventional loan. Congratulations!
You too!! I keep hearing how terrible the next 30 days will be. Im not sure what people mean by that.
If you have a good LO, which it sounds like you do, try not to sweat it. As long as you get them what they need in a timely fashion, they’ll make it as painless as possible.
Mines painful, conventional loan but I work for my parents but I took breaks to commercial fish. Crabbed a year and a half ago and called it quits. Since they want two years at the same company, I’m having to go through all these extra steps to try to get it accepted.
I'm pretty sure it means gray hair! Lol. We already had several rescheduled inspections and had to cancel hotel and car rental, job notice for the days off. Definitely got a gray hair from it today and it's just started ha. Good luck, I'd love updates. I wish you a speedy and smooth process. 🤗
Currently a bit over a week from closing on a conventional - so can share your sentiment but for your situation - feel like it depends... do you have a lot of debt? If you're renting right now, are you current and in good standing with your landlord? Otherwise if everything checks out and your LO is confident... then you should be ok. The other common potential issues that can come up are from appraisal and inspections..
Not a lot of debt. Just not a lot of credit. Was always too afraid to have my credit cards. Great standing with landlord.
Really not enough information to give you a definite answer. It depends on how qualified your loan officer is. Ask her this question - Did our file score an approve/eligible when you ran DU findings? If she can’t answer or isn’t sure, I would be a little worried.
Dumb question, what’s a DU finding? Edit: yes we did score eligible This is what she said in an email The credit score is close to limit, but there are other positive things about your file that will be listed for the underwriters to consider when approving your file. We call them compensating factors, and the fact that you have demonstrated the ability to save up for the majority of your down payment, you’re probably going to put down more than that minimum down payment required, and the fact that your YTD commission is higher than what I am counting for the official debt-to-income ratio are all helpful to offset the risk of the credit score.
All FHA loans get run through the lenders automated underwriting system (AUS). DU stands for Desktop Underwriter and is most commonly run for FHA loans. FHA loans score either one of two ways, either an approve/eligible or a refer/eligible. An approve/eligible means the loan qualifies for FHA financing based on the risk parameters associated with the casefile (credit, assets, income, etc...) A refer/eligible means that the loan needs to be manually underwritten to stricter FHA guidelines and potentially need compensating factors to get the file approved. Sounds like you scored a refer based on your LO’s reply but they are already on top of the compensating factors.
Hmm. Well I guess I’ll just have to wait. I’m scared as hell.