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#412843 - 09/16/12 10:59 AM Mortgage Questions
Kalliea Offline
Member

Registered: 08/15/12
Posts: 18
Loc: USA
I am trying to buy my first home. I am applying for a special kind of mortgage for first time home buyers. It has a higher rate, no mortgage insurance, and no down payment required. It required the applicant to have a credit score over 680, make less than $45k a year, but be gainfully employed in a position that makes more than $28k a year. On the lender's side, they need proof that I have cash funds to pay for a year of insurance, 2 month mortgage payments, at least $500 paid to closing costs, and I need to pay for the the title search and estimate. They also need another financial institution to go in with them on the loan.

Here is where it get's tricky, and makes me worried. I was pre-approved by the bank for the loan, so I thought that meant I would get the loan. I have dedicated myself to buying the house. I have $1000 in earnest money, handed almost $1000 more to the loan officer I've given up my apartment and need to be out on the 1st of October. After I had done all this the loan officer told me he wasn't sure I would get the loan due to a gap in my employment history. (I am an international specialist, and I took a 10 month sabbatical to travel around the world before moving back to the US from Asia. I've only been working in the US for a few months.) Normally the bank requires at least 1 year at the same position.

I have two questions. One, what is the likelihood the loan won't go through? I'm really worried no one will co-sponsor with the bank and I'll be stuck. I have a very solid job (I think) and I have special training for this position, but I have only worked here since July 1.

Two, how long does it usually take for a mortgage application to go through? When I filled out the paperwork the rate was guaranteed until the 15th, but don't know how that relates to the timeline. As I said, the contract with the seller requires a closing on October 1st and I need to be out of the apartment. I'm completely freaking out and it seems like all I can do is wait. I don't know if I should be looking for more apartments or if I should be looking for appliances for the new place.

Any information would be greatly appreciated.


Edited by Kalliea (09/16/12 11:03 AM)

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#412850 - 09/16/12 03:46 PM Re: Mortgage Questions [Re: Kalliea]
Vermont Offline
Major Contributor

Registered: 04/12/08
Posts: 7662
Loc: Vermont's North-East Kingdom
I've never heard of any Bank requiring what you're calling Co-Sponsorship.

What kind of Loan is this anyway?

Any FDIC Insured Lender must comply with Good Lending Practices established by the Comptroller of the Currency of the United States, and that means no more than an 80% Loan to Value (LTV) without PMI of some kind . . . . so is this a loan from a Mortgage Company with some kind of hidden PMI built into the Rate ? Seldom, if ever, would they ever give a 100% loan.

It's hard to provide any advice when in over 25 years, I've never encountered the situation you're describing, or anyone using that terminology "Co-Sponsorship" the way you're using it.
_________________________
Dale C. Hittle of GOLDEN RULE PROPERTIES in Glover, Vermont
Where We're Always Striving To Put Together "THE FAIR DEAL"

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#412854 - 09/16/12 05:38 PM Re: Mortgage Questions [Re: Kalliea]
Kalliea Offline
Member

Registered: 08/15/12
Posts: 18
Loc: USA
As I've never had a loan before, maybe I misunderstood what the bank officer meant. I was pre-approved with the bank, but at the end they said they needed to send it to Texas for something. They needed to see if it would be accepted by...someone else. He made it sound like it was a different institution. Maybe he meant it as an underwriter? I just don't know. All I know is it went from approved to 'questionable' real fast.

There is no PMI because of the higher rate of the loan.

The purchase amount is for less than 80% of the assessed value of the home. Maybe that has something to do with it?

The loan is through a Bank. It is something of a local bank, but it has over 100 years of history...

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#412855 - 09/16/12 05:53 PM Re: Mortgage Questions [Re: Vermont]
Dodger52 Offline
Member

Registered: 10/14/11
Posts: 266
Loc: Montana
Do you know whether or not you are working with a mortgage broker, or a mortgage banker? the "co-sponsorship" sounds suspiciously like a broker looking for a banker to fund the loan.

Did you tell the "mortgage provider" about the lapse in your employment prior to applying for the loan?

Do you know the name of the special program? There are some programs that still allow for 100% purchase loans, but they are very few and the qualifications are very specific. You should be able to research the minimum qualifications and determine whether or not your lapse in employment will keep you from getting approved.
_________________________
Dodger52 (Chris)
Prudential Montana Real Estate
www.MT-RE.net
www.facebook.com/MissionValleyMTHomes

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#412857 - 09/16/12 06:58 PM Re: Mortgage Questions [Re: Kalliea]
Kalliea Offline
Member

Registered: 08/15/12
Posts: 18
Loc: USA
In doing more research I don't see anything that requires a period of employment, and the banker just said they 'like' to see it. He said my loan application wasn't a 'home run' but that I had a good chance. Here are the specifics of the loan:

It is also called a special "sponsored loan"

"Borrowers who can receive loan amounts up to $417,000." - Mine is just over 100k
"Borrowers with a combined household income up to $82,800 can take advantage of 100 percent financing; for those making up to $103,500, 97 percent is the maximum financing". - I (sadly) make much less than this.
Loans are 30-year fixed. The base interest rates for condos are currently at 5% and 4.875% for single-family homes and row houses.
All borrowers must contribute at least $500 toward the loan.
Owner occupancy is required on the home being purchased.
The home appraisal has to come back saying that the market where the property is located is stable.

Pretty sure the property meets these requirements.

"The borrower is required to provide two months of pay stubs, two months of bank statements, and two years of W-2 forms. In order to qualify for full 100 percent financing, the borrower must have a minimum credit score of 680"

I've done all that. My credit score isn't much higher than 680, but it is within range. (Still, I'm a pretty safe bet.)

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#412863 - 09/16/12 08:33 PM Re: Mortgage Questions [Re: Kalliea]
Dodger52 Offline
Member

Registered: 10/14/11
Posts: 266
Loc: Montana
It sounds like you are waiting for approval from the entity that is sponsoring the program, this could be a government program or not for profit type entity.

Originally Posted By: Kalliea


"The borrower is required to provide two months of pay stubs, two months of bank statements, and two years of W-2 forms. In order to qualify for full 100 percent financing, the borrower must have a minimum credit score of 680"



Two years of W-2's tells me they are looking for two years of employment, but it is possible that they are just looking for an average of your income over the last two years. You probably will have to wait and see what they say.
_________________________
Dodger52 (Chris)
Prudential Montana Real Estate
www.MT-RE.net
www.facebook.com/MissionValleyMTHomes

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#412865 - 09/16/12 09:03 PM Re: Mortgage Questions [Re: Kalliea]
Kalliea Offline
Member

Registered: 08/15/12
Posts: 18
Loc: USA
I provided W-2 for the last 2 years (2010+2011.) My income for 2010 was higher than the max allowed. 2011 I didn't work the entire year, but I made less than the maximum, and almost what I make in an entire year now.

Also...I was living in Japan in the time. I provided my Japanese W-2 along with my tax returns statements for the last 2 years. Will that count against me?

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#412869 - 09/17/12 01:52 AM Re: Mortgage Questions [Re: Kalliea]
Dodger52 Offline
Member

Registered: 10/14/11
Posts: 266
Loc: Montana
If they are looking for continued employment the gap may count against you. But if they are looking for an average annual income it will help.

These days you never know until the file gets all the way through underwriting, its frustrating but try to stay calm, you will know pretty quick.
_________________________
Dodger52 (Chris)
Prudential Montana Real Estate
www.MT-RE.net
www.facebook.com/MissionValleyMTHomes

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#412875 - 09/17/12 08:16 AM Re: Mortgage Questions [Re: Kalliea]
Kalliea Offline
Member

Registered: 08/15/12
Posts: 18
Loc: USA
Should I start the process for an FHA loan while I wait? Time is such a factor...

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#412876 - 09/17/12 09:15 AM Re: Mortgage Questions [Re: Kalliea]
Vermont Offline
Major Contributor

Registered: 04/12/08
Posts: 7662
Loc: Vermont's North-East Kingdom
Originally Posted By: Kalliea
Should I start the process for an FHA loan while I wait? Time is such a factor...

That involves (at least around here) another 6 to 8 weeks.

You might be well advised to not change horses in the middle of the stream. October 1st is only 2 weeks away.

Who's advising you locally ?

Do you have an Attorney . . . . or a Real Estate Broker helping you ?
_________________________
Dale C. Hittle of GOLDEN RULE PROPERTIES in Glover, Vermont
Where We're Always Striving To Put Together "THE FAIR DEAL"

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#412879 - 09/17/12 10:28 AM Re: Mortgage Questions [Re: Kalliea]
Kalliea Offline
Member

Registered: 08/15/12
Posts: 18
Loc: USA
I have a realtor and the banker helping me.

I had originally thought I would be doing the FHA loan, so I got everything ready and was pre-approved with a local mortgage broker. I just wonder if I should call him again and ask how long the process would take on his end.

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#413361 - 09/25/12 11:03 AM Re: Mortgage Questions [Re: Kalliea]
johnnyloans Offline
Veteran Member

Registered: 03/29/09
Posts: 870
Loc: Los Angeles ,CA
Two months on the job and 10 months gap in employment before that sounds like a shaky employment history. Maybe you should wait until your employment history is a little more solid.
_________________________
Johnny James
Real Estate Broker in CA
(855) 898-3354
Greater Los Angeles Area
www.PalmdaleRealestate.biz
Have Car Will Travel
For Those That Google JohnnyJamesBroker@gmail.com

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#442584 - 01/23/15 01:57 AM Re: Mortgage Questions [Re: Kalliea]
Danny Derek Offline
Junior Member

Registered: 01/23/15
Posts: 3
Loc: united state
Are you looking for Live and Free Loan and Mortgage Quotes? Visit Fixed Rate website today for free subscription...

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Edited by Danny Derek (01/23/15 02:01 AM)

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