Financing in New Albany>Question Details

Mrileyoct1, Home Buyer in Clarksville, IN

Got a refer for home loan. So LO says it will have to be manually underwritten.

Asked by Mrileyoct1, Clarksville, IN Fri May 20, 2011

LO told us that we would have to have either a utility bill or rent letter for the past 12 months. We can't provide that since we have lived with family for 9 months now since the rental property (which was privately owned) the owners had to move back into. However we did open up a credit card about 10 months ago and another 6 months ago. I have a very strong work history. I also have a letter from previous (not the last one) but one before landlord stating that I always paid and on time and left with zero balance. I can also provide documentation showing where I have paid union dues which are not payroll deducted every month for the past 4 years. I am on a family members cell plan but have paid on time each month. However, I usually do business with cash. That is just how I have always done it. So I do not have cancelled checks that could be provided. I can also provide document and cancelled checks for storage for last 9 months. Do you think that it is possible to get this approved?

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Answers

1
it sounds like they are searching for non-traditional forms of credit to meet the loan's minimum trade line requirements, my guess is that it's an FHA loan, but I am just speculating.

3 non-traditional forms of credit (called trade lines) of 12 months old are needed.

The most commonly accepted and easy to document ones, in order, are:

1. Rent (if you pay to a private individual, cancelled checks are also needed)
2. Utilities (gas, electric, water, landline home phone, or cable TV)
3. Insurance (non pay-roll deducted medical, life, auto, renters)
4. Child care payments made to a business
5. School tuition
6. Retail stores (department, furniture, appliance, specialty, rent-to-own, internet/cell phones)
7. 12-month savings pattern evidenced by regular (at least quarterly) non-payroll deposits
8. Personal loans with evidence of payment terms and 12 months canceled checks

Your credit card that is 10 months old will be at least 1 month older by closing, and if you aren't already under contract yet it may very well be 12 months old by the time you close. If you need that particular trade line to qualify then you may want to ask if they can just make it a condition that the trade line needs to be 12 months by the time you close - allowing to you be pre-approved but putting a limitation on how soon you could close.

The rental history from your prior landlord could be used if you have copies of the cancelled checks you paid rent with as well.

The union dues could also be used if you can document the paper trail for the payment history.

Cell phone can only be used if your name is on it, however if you can show paying X amount per month to the other family member in the form of a cancelled check then an underwriter may find that acceptable.

Not knowing if that is the issue or not makes it tough to give more specific advice.
0 votes Thank Flag Link Fri May 20, 2011
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