HELP: The underwriting process and getting approved

8 Replies

Hi BP,

As some of you know, I've been working on purchasing a home since August. I've been attempting to use the group NACA; however, it is becoming increasingly frustrating because they keep push back my approval date.

As a result, I'm reaching out to the BP community for help on where to get a mortgage from and how to do it the "traditional way".

Background info you may need to be helpful:

I've been repairing my credit score for 6 months. I went from a 549 with $3000 past due (being 19 and carefree) to a 650 (score obtained from credit tracking on quizzle.com) with no money past due. My boyfriend has a credit score of 727 and has never had an issue with delinquent accounts/past dues. We have about $5600 saved and are planning to have $6500-$7000 in the next month or two. We were considering using an FHA loan (since you only need 5% down) for a home between $100k-$140k in the following zip codes 19032, 19036, 19018 (Delaware County, suburbs of Philadelphia).

Any help anyone could provide about how to get financing, good groups to use, or just advice in general would be greatly appreciated. It's becoming a very stressful process and I knew that BP was the place to come to get answers, feedback and encouragement!

Thanks in advance,

E

You need to sit down with an FHA lender/mortgage broker, not one of the big banks because their own additional overlays (additional restrictions) on top od FHA. They can tell you what you qualify for, as well as what your closing costs, 5-6%, MIP insurance, etc. will be. You can structure your purchase contract so the seller pays 3% toward your closing costs, if they agree, and if the house appraises for that amount. You can get a "rebate" toward your closing cost, from the lender, by paying a slightly higher interest rate. Until you do this, everything else is just speculation. The minimum FHA down payment is 3.5%.

Hi Wayne,

Thank you so much for that information. I'm going to speak with a broker that a friend recommended. I was thinking about "sellers assist" like you mentioned.

I would also recommend talking to a broker, they can give you options on FHAs, although they are all pretty much the same. Minimum downpayment is 3.5% as Wayne pointed out. Also, I believe you can ask for up to 6% in sellers assist on FHA loans. Although it can be tricky if the seller does not have that much cash on hand. If you are purchasing in Philadelphia, there is a 4% transfer tax (Usually 2% for the seller and 2% for the buyer) that is paid at closing.

Thank you for the input Brandon! I didn't realize you could ask for 6%. I'm looking outside of Philadelphia, but that's good information to know.

Andresa: Right now the debt to income ratio for my bf and I is about 22%. I have school loan debts; however, he doesn’t have any. Neither one of us have any other debt (credit cards, bank loans, car, etc.) at all. We are looking to stay in a mortgage payment of $1200 (including mort. interest, tax and insurance). We're also going to have two people rent rooms from us. I’m not sure if that information is helpful/relevant to the information you were going to provide or not.

@Elisha Keller ..not sure about NACA in your area, but a friend in the ATL went thru the timely process and bought a new place with a great interest rate.(like 2%) It was beneficial...So don't give up on the program, but of course consider other options...good luck!

Hi Andresa--we are going to be putting it in both of our names.

Rolanda-thank you for your response. We are looking into other options at this time. NACA is a great group; however, if you're looking to move in a shorter time frame than a year, you're really out of luck with them. We've been working with them since January and after jumping through all of the hoops were told we may be able to reapply in June but most likely December. They're great people; however, there is no wiggle room with their group if you'd like to get things done quickly.

We've found a gentleman (mortgage broker) to work with who comes HIGHLY recommended from a good friend of mine. He's the person that originally ran my credit in August and saw all of the improvements we've made.

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