Home Buying in 13502>Question Details

Ellie_grzesik, Home Owner in Utica, NY

Mortgage help!!!!!

Asked by Ellie_grzesik, Utica, NY Mon Sep 5, 2011

We were called a week ago saying that we would be closing this week. Our bags and boxes were packed and we were anxious to move in before my daughter started kindergarten. The bank says everything is going great and real smooth and not to worry. We turn in all our paperwork asap and we had the committment letter too.

The underwriter's boss won't let us get an FHA mortgage because he doesn't have enough credit history from the past 2 years. He lived with his parents and paid cash for his phone, his car, and rent (to his parents), and he wrote a letter stating why he didn't have proof of those things paid. He didn't have student loans because he paid with cash but for the past 8 months he paid off a 1000 dollar ring (payments larger than asked and on time) and he has a $500 limit on a credit card and we use and pay off every month on time more than asked for.

We can't get a loan without a co-signer and we can't find one.... Do we change banks? What do we do? Need to move ASAP!

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Ellie,
FHA backs the loans and puts minimum guidelines for approval, but individual lenders can set conditions over and above FHA minimums. Shane did a good job at giving you some non-traditional trade lines to consider and at yelling at your lender. It's really a shame this didn't get caught up front and really should have.
Tell this lender to look at all the options and that they should have notified you of this before you paid for an appraisal and packed your stuff. You have a legitimate reason to be angry with them.
In the mean time, talk to some other lenders and be right up front with your situation. No sense wasting time with someone who will run into the same thing.
On a personal note, it's a shame when someone who has been responsible, paying cash and not getting in over their head can't qualify. It's also a lesson to get credit, you have to use some. Let us know how this turns out.
0 votes Thank Flag Link Mon Sep 5, 2011
I will be happy to provide you with some help. Email or call me Gail@GailGladstone.com or 631-425-6150 and I will direct you to mortgage folks I use all the time (even on my own mortgages).

If anyone can do it, one of them will be able to.
Web Reference: http://GailGladstone.com
0 votes Thank Flag Link Mon Sep 5, 2011
Ellie you indeed need to start calling other local and trusted banks or mortgage companies. This should have been taken care of right up front and not allowed to go so long. This is what prequailifications and preapprovals are for. FHA is pretty strict so if FHA said no, it has nothing tio do with that loan officer, any other one will have trouble as the FHA file stays live for 6 months in your name. Be up front with who you call and see if they can assist, dont you have a buyer broker who is guiding you and assisting you through this process?
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Mon Sep 5, 2011
Having a certain amount of credit history is important to being able to qualify for an FHA mortgage. The credit history can be traditional (such as credit cards, student loans, mortgages, car loans, etc.) or non-traditional (such as utilities, cell phone, non-payroll deducted insurance, etc.).

With most lenders FHA loan programs they are looking to see 3 trade lines of 12 months each, but I've read as little as 1 traditional trade line with 12 months of recent credit history can be acceptable (that is our guideline in order for a score to be able to be used - a minimum of 1 trade line either installment and/or revolving that has been active for at least the previous 12 months).

Does the bank you are going with accept non-traditional credit? I have outlined a lot of information about non-traditional credit in the web reference, including examples of non-traditional credit that can be used (perhaps some you haven't already thought of), how much of it is usually needed, and how someone can verify their non-traditional credit in order to qualify for a mortgage. If he cannot document enough non-traditional credit, then he may not be able to be deemed credit-worthy for a mortgage. It's a shame this lender wasn't able to make this determination earlier in the process - as in WHEN YOU APPLIED FOR THE MORTGAGE AND CREDIT WAS IMMEDIATELY CHECKED (that is me yelling at your bank for you).

http://www.fhaoutreach.gov/FHAHandbook/prod/infomap.asp?addr… are the official FHA guidelines on "Borrower Credit Analysis"

Is your bank M&T Bank?
0 votes Thank Flag Link Mon Sep 5, 2011
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