Has anyone gotten a manual underwrited loan?

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Has anyone gotten a manual underwrited loan?

William Kelly
Fort Bragg, NC · Member since 2017 · 27 posts · 15 votes

I was wondering if anyone has ever done a manual underwriting loan simply because they had no credit?

A little background about me: For the longest time I never believed in credit. I have never had a credit card. I have never been in debt. I have never owed anybody a single penny. When I bought my car it was full cash. Any big purchases was full cash. If I didn't have the money to buy it then I wouldn't purchase it.

Now moving forward: I am 23 years old and have never been in debt a day in my life. So I simply have absolutely no credit. I have about 25k cash saved up to begin investing in real estate. My car and all my belongings are fully paid off. I would say my net worth is about 55k and about 35k of that is liquid the rest tied up in ROTH IRA's/retirement accounts. Now I do need to mention that I am in the military so I am looking into the VA loan.

My plan is to purchase my first investment property within the next 3-6 months once I redeploy back to the states. (I'm currently deployed) But I want to hit the ground running when I get back in a few weeks. I think my biggest obstacle is financing so what do you guys think? Can I get a manual underwriting loan?or VA loan? I reside in the Fayetteville, NC.

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  • Michael Cohen
    Investor · Towson, MD · Member since 2014 · 472 posts · 257 votes
    9y
    Hi William Kelly This is going to be a lender-by-lender issue, but most large banks, credit unions, and national lenders won't manual underwrite, so you'll have to call around to ask. My suspicion is that you will get a higher interest rate because of this. Many people have the same concerns you do about debt and see it as a dirty word. From a lenders perspective, your credit history and score is an indication that you honor your obligations (debts, bills, etc.) as you say you will. Without any history, you're basically telling the lender "trust me." There are a few options: 1) alternative trade lines - have nonstandard monthly obligations added to your credit report: rental history, cell phone bill, car insurance, etc. 2) establish traditional credit quickly with small credit cards. They can be secured or unsecured. If you use them to by gas and pay off immediately, there will be activity showing but you won't be racking up any debt. Just building credit. This should take about six months to establish lines on all three credit bureaus. The most common stipulations regarding alternative trade lines are: -Minimum 3 credit references with 12 month history. -No major adverse or public records filed in the last 12 months. -No housing late payments. -Maximum 1×30 day late payment with the other credit references in the previous 12 months. The housing late payments are the most important. NOTE: I am NOT a credit repair expert and my advice should be used as guidance only. Please consult with a reputable credit repair expert!!!
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  • Bryan C.
    Investor · Spokane, WA · Member since 2014 · 733 posts · 155 votes
    9y
    What do you mean manually? The lender should take your military income into consideration. Your debt-to-income is important for qualifying and if you use VA you can "house hack" and get a 2-4unit where tenants pay your mortgage, you get hands on experience and after a year can move out and do it all again!
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  • Michael Cohen
    Investor · Towson, MD · Member since 2014 · 472 posts · 257 votes
    9y
    Bryan C. He's referring to lender's automated underwriting software. Whit it returns "Manual/Eligible" or "Manual/Ineligible" it means the software cannot determine if the file meets guidelines and must be manually reviewed by an underwriter. The eligible vs. ineligible indicates whether the borrower has the required cash to close: down payment, closing costs, reserves, etc.
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  • Zack KarpPro Member
    Lender · Schaumburg, IL · Member since 2015 · 833 posts · 774 votes
    9y

    @William Kelly we do manual underwriting for FHA and VA, but unfortunately we are not licensed in NC.

    If you need a referral to a rockstar LO in NC that does manual UW on VA, feel free to send me a PM.

    TYFYS and best of luck brother!

    847-387-5513
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