First loan app but no funds

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First loan app but no funds

Henderson Silva
Newark, NJ · Member since 2015 · 25 posts · 2 votes

so i implied for my first loan. It looks like i would be approved for a 170 thousand loan, but i need to have the 6000 in funds for a down payment. I dont have it and they won't accept friend's gift, it has to be a family member for the fha. The closing cost can be covered by the seller so i only need the 6000 and I'm stuck. I will be eligible for a VA loan 6 months from now, but i wanted to use the fha loan first so when i get the second property i could use the va loan and avoid the 20 to 25% down payment. Here is the email that i just got from navy federal>>>>>>>>>>>>>>>>>>>>

If you can obtain the $6,000 in funds from a family member, then I will update your application with that information and then send it for a pre-approval decision with a revised purchase price of $170,000. Also, could you please provide an expected end date for your service in the reserves?

If you do expect to be able to proceed with this application, then please plan to provide the items listed below to expedite the loan process:

1. Most recent pay stub(s) showing at least 30 days of year-to-date earnings
2. Most recent month end bank statement(s) and/or retirement account statements (all consecutive pages) showing assets to cover down payment and closing costs
3. W2s for 2013 and 2014
4. Legible copy of driver license and social security card

I am also attaching the following forms that you will need to complete and return ASAP:

5. 4506T (request for tax transcripts)
6. SSA-89 (Social Security verification)
7. Borrower Signature Authorization




Please, sign and return the documents

What do you guys think? Try to save the money within the next 3 months and apply again or wait and use the va loan? 

I really wanted my fha first plan to work.

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Christopher Brainard
Rental Property Investor · Rockwall, TX · Member since 2015 · 891 posts · 701 votes
10y

No offense, but if you don't have 3% to close on a deal, you probably shouldn't be looking to purchase real estate. You would be better served educating yourself on personal finance and working out a plan to set aside an emergency fund and save for your 1st home.

-Christopher

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  • Christopher Brainard
    Rental Property Investor · Rockwall, TX · Member since 2015 · 891 posts · 701 votes
    10y

    No offense, but if you don't have 3% to close on a deal, you probably shouldn't be looking to purchase real estate. You would be better served educating yourself on personal finance and working out a plan to set aside an emergency fund and save for your 1st home.

    -Christopher

    7Reply
  • Scott Carder
    Investor · Owasso, OK · Member since 2013 · 166 posts · 90 votes
    10y

    Can you sell a car or something?

    1Reply
  • Henderson Silva
    OP
    Newark, NJ · Member since 2015 · 25 posts · 2 votes
    10y
    Originally posted by @Scott Carder:

    Can you sell a car or 

    We do have 2 cars .. but i do need it to go to work and my wife too. However maybe i could sell it and get a cheaper one and use the difference for the down-payment. Thanks.. ill keep that in mind

    1Reply
  • Henderson Silva
    OP
    Newark, NJ · Member since 2015 · 25 posts · 2 votes
    10y
    Originally posted by @Christopher Brainard:

    No offense, but if you don't have 3% to close on a deal, you probably shouldn't be looking to purchase real estate. You would be better served educating yourself on personal finance and working out a plan to set aside an emergency fund and save for your 1st home.

    -Christopher

     You might be right. But i would actually pay less for the house than i pay for rent right now. Rent is high in nj. About 1500 a apartment with 3 bedrooms and the houses are still priced pretty low. I understand that there are other costs with the house however it still seems like it would be worth it.

    0Reply
  • Christopher Brainard
    Rental Property Investor · Rockwall, TX · Member since 2015 · 891 posts · 701 votes
    10y

    It depends. 

    If something major goes out, like the HVAC or the roof, you won't have the capital to repair it. When you're renting, if something goes wrong, you just call the landlord and make the expense come out of their pocket.

    Having an emergency fund is very important. There are also a ton of life events that can go wrong - you could get injured, you could lose your job, you might have a family emergency, etc. It can get you into quite the pickle. The emergency fund covers you for the unexpected things in life - It ensures you, and your family, can survive comfortable when things go south. 

    -Christopher

    4Reply
  • Charlie Fitzgerald
    Lender · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
    10y

    You also will not be able to have an FHA loan and a VA loan at the same time. Switch the current Loan to a no down VA, have the seller cover all closing costs and it take a little higher rate to pay for some of them if you have to. Get a home that has a llower payment than renting and SAVE the difference.

    2Reply
  • Henderson Silva
    OP
    Newark, NJ · Member since 2015 · 25 posts · 2 votes
    10y
    Originally posted by @Charlie Fitzgerald:

    You also will not be able to have an FHA loan and a VA loan at the same time. Switch the current Loan to a no down VA, have the seller cover all closing costs and it take a little higher rate to pay for some of them if you have to. Get a home that has a llower payment than renting and SAVE the difference.

     That's interesting. . So i can not get a va loan if i have an fha loan? What i was planning to do is use the fha loan first and after a year of the required minimum apply for a va loan and move to the va loan house. So what you are saying is that even after a year in the fha loan house i cant get a va loan?

    0Reply
  • Charlie Fitzgerald
    Lender · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
    10y

    I government guaranteed loan at a time...except under rare circumstances which your plan will not qualify for.

    0Reply
  • Ryan JacksonPro Member
    Rental Property Investor · Camarillo, CA · Member since 2014 · 80 posts · 18 votes
    10y
    Charlie Fitzgerald seems to have a huge knowledge base and will no better. But the only way I can see having both is if you are active duty and PCS away from the FHA house and then can use VA loan. If you need to build up capital are you able to activate for a year and go over seas to make the big bucks?
    0Reply
  • Ryan JacksonPro Member
    Rental Property Investor · Camarillo, CA · Member since 2014 · 80 posts · 18 votes
    10y
    *know better, got auto-corrected!
    0Reply
  • Henderson Silva
    OP
    Newark, NJ · Member since 2015 · 25 posts · 2 votes
    10y
    Originally posted by @Charlie Fitzgerald:

    You also will not be able to have an FHA loan and a VA loan at the same time. Switch the current Loan to a no down VA, have the seller cover all closing costs and it take a little higher rate to pay for some of them if you have to. Get a home that has a llower payment than renting and SAVE the difference.

     Hey i found this while doing my research. Are you sure i cant get a va loan after i use the fha and love in the ho7se for at least a year. I would then move to my new house with the va loan.

    principal residence is defined as a home in which the borrower intends to reside for a majority of the calendar year. A veteran cannot obtain a VA and FHA loan at the same time with the intention to live in both as an owner-occupant. Lenders typically include an affidavit or certification in their loan documents that the borrower must sign, verifying that the home will be owner-occupied. A veteran who intentionally deceives the lender and federal government by obtaining the loans under false pretenses risks having to repay the loans immediately, foreclosure by the lender and possibly federal criminal charges.

    Exceptions

    A veteran can obtain a FHA loan before or after obtaining a VA loan, by signing as a non-occupant co-borrower or co-signer on the FHA loan. This involves taking responsibility for the FHA loan's repayment without actually living in the home. A co-borrower co-owns the home, whereas a co-signer simply acts as a guarantor without ownership rights. A veteran might do this to help a family member with insufficient income buy a home.

    0Reply
  • Ryan JacksonPro Member
    Rental Property Investor · Camarillo, CA · Member since 2014 · 80 posts · 18 votes
    10y
    Henderson Silva I would find a local mortgage guru, maybe on here, who will have professional knowledge. I know it is possible to have multiple govt loans, but not an expert on how to get them.
    0Reply
  • Matt Motil
    Rental Property Investor · Cleveland, OH · Member since 2015 · 1k+ posts · 880 votes
    10y
    Originally posted by @Henderson Silva:
    Originally posted by @Charlie Fitzgerald:

    You also will not be able to have an FHA loan and a VA loan at the same time. Switch the current Loan to a no down VA, have the seller cover all closing costs and it take a little higher rate to pay for some of them if you have to. Get a home that has a llower payment than renting and SAVE the difference.

     That's interesting. . So i can not get a va loan if i have an fha loan? What i was planning to do is use the fha loan first and after a year of the required minimum apply for a va loan and move to the va loan house. So what you are saying is that even after a year in the fha loan house i cant get a va loan?

    After the year, refi the FHA loan into a conventional mortgage (assuming you have descent credit - and if you don't, work on it over the year). After you refi into a conventional mortgage, move out and buy another property to live in using FHA or VA financing.

    As for the down payment, how fast do you need it? 3 months? $2000/month = $500/week. Can you get a second job? borrow money from a relative (even offering them interest)? 

    Can you drive your car for Uber in the evening or on weekends? 

    When you have no money is when you need to get creative. Right now is when you will learn one of the greatest lessons in investing: How to raise capital fast when you need it. 

    It's time to get creative, lace up the boot straps and get out there and get the money you need. When you start turning over every rock and option, you'll figure it out. 

    2Reply
  • Henderson Silva
    OP
    Newark, NJ · Member since 2015 · 25 posts · 2 votes
    10y
    Originally posted by @Matt Motil:
    Originally posted by @Henderson Silva:
    Originally posted by @Charlie Fitzgerald:

    You also will not be able to have an FHA loan and a VA loan at the same time. Switch the current Loan to a no down VA, have the seller cover all closing costs and it take a little higher rate to pay for some of them if you have to. Get a home that has a llower payment than renting and SAVE the difference.

     That's interesting. . So i can not get a va loan if i have an fha loan? What i was planning to do is use the fha loan first and after a year of the required minimum apply for a va loan and move to the va loan house. So what you are saying is that even after a year in the fha loan house i cant get a va loan?

    After the year, refi the FHA loan into a conventional mortgage (assuming you have descent credit - and if you don't, work on it over the year). After you refi into a conventional mortgage, move out and buy another property to live in using FHA or VA financing.

    As for the down payment, how fast do you need it? 3 months? $2000/month = $500/week. Can you get a second job? borrow money from a relative (even offering them interest)? 

    Can you drive your car for Uber in the evening or on weekends? 

    When you have no money is when you need to get creative. Right now is when you will learn one of the greatest lessons in investing: How to raise capital fast when you need it. 

    It's time to get creative, lace up the boot straps and get out there and get the money you need. When you start turning over every rock and option, you'll figure it out. 

     Thank you so much for the suggestions. .. turn the fha into conventional is a great way. That way i know i will have no problem getting thw va loan. Thank you

    Yea im in the process of getting a part time job this morning. I just might uave to wait 2 to 3 more mo tha to get the money together. Thanks

    0Reply
  • Henderson Silva
    OP
    Newark, NJ · Member since 2015 · 25 posts · 2 votes
    10y
    Originally posted by @Ryan Jackson:

    Henderson Silva I would find a local mortgage guru, maybe on here, who will have professional knowledge. I know it is possible to have multiple govt loans, but not an expert on how to get them.

     Thanks

    0Reply
  • Charlie Fitzgerald
    Lender · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
    10y

    The instances where you can have more than one gov't loan arise when you are relocated by an employer or have a reason beyond your control that you are no longer able to live in the home with the 1st gov't loan.  Simply wanting to build a real estate portfolio is not a justifiable reason for multiple gov't backed loans.

    My point in advising you to use your VA benefits for your present acquisition is that you can do that with no money down. Since you seem to not be able to perform on your purchase contract due to not having the down payment needed for an FHA loan. If you intend to buy another property down the road and use the FHA loan products for that transaction, then you would need to refinance your departing residence with the VA loan to conventional prior to doing so. Of course if you did that, then you could use your VA loan again and buy with zero down payment again.

    2Reply
  • Charlie Fitzgerald
    Lender · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
    10y

    Also, the example you use above does not apply to you.  You are not buying the current home as a non-occupying co-borrower.  You are buying it as a primary residence.

    0Reply
  • Alexander FelicePro Member
    Guy with Great Hair · Austin, TX · Member since 2013 · 2k+ posts · 4k+ votes
    10y

    @Charlie Fitzgerald can I confirm the specific circumstances to which you are referring?

    I own both a VA loan and an FHA loan. I bought my first place with the VA loan and 3 years later I bought a new primary with an FHA. no problems at all, no one even brought this issue up to me.

    [email protected]Podcast Guest on Show #301
    0Reply
  • Henderson Silva
    OP
    Newark, NJ · Member since 2015 · 25 posts · 2 votes
    10y
    Originally posted by @Alexander Felice:

    @Charlie Fitzgerald can I confirm the specific circumstances to which you are referring?

    I own both a VA loan and an FHA loan. I bought my first place with the VA loan and 3 years later I bought a new primary with an FHA. no problems at all, no one even brought this issue up to me.

      thats what i plan on doing. But i was trying to get the fha first. 

    0Reply
  • Charlie Fitzgerald
    Lender · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
    10y

    A federally-backed home loan is intended for use by a borrower who occupies the house as a primary residence. FHA and VA prohibit investors from using the loans to acquire income properties. A veteran, or qualified family member such as the unmarried widow of a deceased veteran, can obtain one loan type initially, and the other loan type on a different property, in the future, without having to pay off the prior loan. In such a case, the veteran would have both loans at the same time.

    A principal residence is defined as a home in which the borrower intends to reside for a majority of the calendar year. A veteran cannot obtain a VA and FHA loan at the same time with the intention to live in both as an owner-occupant. Lenders typically include an affidavit or certification in their loan documents that the borrower must sign, verifying that the home will be owner-occupied. A veteran who intentionally deceives the lender and federal government by obtaining the loans under false pretenses risks having to repay the loans immediately, foreclosure by the lender and possibly federal criminal charges.

    So, while it is not impossible to get an FHA loan on a home you declare as a primary residence, and then at some point in the future, buy another home that you declare as a primary residence using your VA benefits, unless there are justifiable mitigating circumstances for doing so, you are in fact committing loan fraud and are liable for these actions.

    1Reply
  • Charlie Fitzgerald
    Lender · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
    10y

    The other misinterpretation you are making here is that the requirement for the FHA loan, or the VA loan is that you live in it for 1 year...and then you can do whatever you want. That's not factual. What the requirement says is that you must occupy the home "for the majority of the calendar year" meaning every calendar year that you own the home...not, just the 1st year. Gov't backed loans are NOT intended to be made available for people to build rental real estate portfolios folks. (With the exception of using them to buy multi-family housing which you are going to occupy AND rent out other units in). They are intended to assist Veterans and lower income families with acquiring a primary residence for themselves and their families.

    0Reply
  • Shaun Weekes
    Loan Officer / Processor / Life & Health Agent · Rancho Cucamonga, CA · Member since 2014 · 1k+ posts · 757 votes
    10y

    @Henderson Silva

    You can have a VA and FHA loan at one time. It's very difficult and rare to have 2 FHA loans at once.

    Sell your car and get a cheaper car.  Use the difference towards the down payment.  Also make sure the payment is less and don't sell it for cash.  Make sure you have a paper trail!

    If you're putting down 3.5% it's unlikely that you'll have enough equity to refinance into a conventional loan in one year.  Unless of course you save up major for all the difference.

    I think you should hold on to your FHA loan a little longer than a year and when you have 6 to 12 months in reserves execute the VA purchase.

    Also consider a conventional loan for 3% down.  Gift funds can be from a close friend like a buddy you served with or your best man.  Someone close like this.  

    Look for an LO or Broker who gives you more than one option and is knowledgeable and you ll be fine.

    Good luck.

    1Reply
  • Mike H.
    Rental Property Investor · Manteno, IL · Member since 2009 · 2k+ posts · 2k+ votes
    10y

    Back to the question of getting the loan. How long is your friend willing to let you have the 6k?  Ultimately, you just need to stick the 6k in your bank account and let it sit for 3 months. 

    They'll only ask you for 2 months of bank statements so the deposit will no longer be on there and you will not have to explain how you got that money. You just need to season the funds. 

    Two things though:
    1) Will your friend be ok lending you 6k for that long?

    2) You'll need to check with an attorney to make sure there's not an issue there in terms of the loan docs possibly asking you explicitly if any of the money is borrowed or something to that effect.  If so, then this won't work.

    You don't want to lie on a loan application these days......

    Now if your friend is truly giving you a gift and it seasons over 2 months in your account, then I don't see that you'd have any problem at all.  Ultimately, the gift thing only applies if the funds are received within the two month window. 

    They can't go back forever and ask you how much money in your account is from gifts from 2009...... :-)

    0Reply
  • Henderson Silva
    OP
    Newark, NJ · Member since 2015 · 25 posts · 2 votes
    10y
    Originally posted by @Shaun Weekes:

    @Henderson Silva

    You can have a VA and FHA loan at one time. It's very difficult and rare to have 2 FHA loans at once.

    Sell your car and get a cheaper car.  Use the difference towards the down payment.  Also make sure the payment is less and don't sell it for cash.  Make sure you have a paper trail!

    If you're putting down 3.5% it's unlikely that you'll have enough equity to refinance into a conventional loan in one year.  Unless of course you save up major for all the difference.

    I think you should hold on to your FHA loan a little longer than a year and when you have 6 to 12 months in reserves execute the VA purchase.

    Also consider a conventional loan for 3% down.  Gift funds can be from a close friend like a buddy you served with or your best man.  Someone close like this.  

    Look for an LO or Broker who gives you more than one option and is knowledgeable and you ll be fine.

    Good luck.

     Thank you ... great informationand suggestions. .. 

    0Reply
  • Henderson Silva
    OP
    Newark, NJ · Member since 2015 · 25 posts · 2 votes
    10y
    Originally posted by @Mike H.:

    Back to the question of getting the loan. How long is your friend willing to let you have the 6k?  Ultimately, you just need to stick the 6k in your bank account and let it sit for 3 months. 

    They'll only ask you for 2 months of bank statements so the deposit will no longer be on there and you will not have to explain how you got that money. You just need to season the funds. 

    Two things though:
    1) Will your friend be ok lending you 6k for that long?

    2) You'll need to check with an attorney to make sure there's not an issue there in terms of the loan docs possibly asking you explicitly if any of the money is borrowed or something to that effect.  If so, then this won't work.

    You don't want to lie on a loan application these days......

    Now if your friend is truly giving you a gift and it seasons over 2 months in your account, then I don't see that you'd have any problem at all.  Ultimately, the gift thing only applies if the funds are received within the two month window. 

    They can't go back forever and ask you how much money in your account is from gifts from 2009...... :-)

     Lol @ they cant go back to 2009 and ask about gifts..lol.. you are right...

    Thanks for your comment.. i believe that the best route might be to just make the money within the next 2 to 3 months with a paper trail of a part time job. Its actually 4300 because i do have 1700 available now.  

    Ok on my way to work.. applied for a part time job on my days off from work and i got the job... 

    Thanks

    0Reply
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