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December 18, 2018 at 12:35 pm in reply to: Need Help on Property Specific Letter Error and Error on Qualification Documents #46993
Hi, @rochel3628, my purchase price was $273,500. I haven’t closet yet, but according to my loan application the money was applied as followsed: Buy Down (Buyer) $11,633, Buy Down (Lender) $28,934, Principal Reduction (Buyer) $34,862. This comes out to $46,495 of buyer funds which is exactly 17 % of the purchase price. I have no seller contributions in my transaction.
The part that never made sense to me was that it would take 17 points to buy down my 4.375% rate to 0.125% and each point is based 1% of the loan amount and not the purchase price. Why do I need to contribute 17% of the purchase price and not 17% of the final loan amount (273,500 -34,862)? I don’t know exactly, but that is how it worked for me. I can’t complain because it seems even more beneficial than the formula I was calculating myself.December 18, 2018 at 10:57 am in reply to: Need Help on Property Specific Letter Error and Error on Qualification Documents #46991
Good luck on this part of the process as it becomes more stressful. I am not sure if you can be re-qualified for a higher monthly amount at this stage. I think any changes to your income/qualification amounts at this point would make you go through underwriting again, but maybe it can be done at the same time during your upcoming credit access underwriting.
Your MC should change your intended interest rate to 0.125 % or whatever you want/need to qualify for the house, otherwise the underwriter would obviously disqualify you unless you could show $170,000. I have been told that on the MC’s screen when they input all this stuff has a dropdown box where the MC selects the intended interest rate in 1/8 increments, so it should be easy enough to fix (although, I could be getting mixed up with the loan application stage).
I am still in the closing process myself, but I bought down the interest rate down to 0.125% from 4.375% with BoA and the amount I needed to contribute was exactly 17% of the purchase price of the home (make sure you have this in your bank) and it ended up reducing my loan amount by roughly 13% which is great. I am not sure what is their formula, but they key for me was making sure I had enough in my bank account for my contribution portion.
You need to speak to the office manager and ask them to step in and at least explain to the MC how the grant works and what they need to do on your file. Probably not many counselors are familiar with the process. If the office manager can’t help you then call member services and ask for the regional manager. If you are under contract then time is of the essence for you and you are going to have to be your biggest advocate to move your file forward.
I was finally able to speak to my MC on the phone this morning and she still says I need to amend the contract because the underwriter is the one asking for it and I can’t be approved from Credit Access without the contract showing 100% financing. I explained to her my interest buy-down situation with the principal reduction but I still need to have 100% financing. My agent is still trying to get the amended contract from the sellers.
She did say she will accept the activity page from my brother’s bank account despite it not having his name or address on the activity page since I also sent his prior month’s bank statement too. We shall see.
Hopefully this will help someone else in the future.
Hi Tim, thanks for the thoughtful response. I agree with your understanding of the situation but my MC (or the Naca underwriter) keeps throwing things at me and I don’t think I will get past Credit Access at the earliest til next Monday which would be exactly 21 days since contract.
I addressed the conditions from the first credit access submission –
1) write a LOE for an old debt from 2015 on my credit report
2) “Attached please finds the schedule C from your tax returns from 2017 and 2016. Please provide your date of employment for these businesses.” I am self-employed and had three separate businesses on my 2017 Schedule C Tax Return I had 1099 income from 3 different companies so I had 3 separate self-employed businesses that overlapped in 2017. Currently I only get 1099 income from one of the companies.
I completed these and sent later than evening thinking I would be good to go. Turns out I now get more conditions. I really wish I could have addressed these when I was originally qualified instead of during credit access because now time is of the essence.
This morning my MC emailed me 3 new conditions-
1) “Due to you not being in the same field of work consistently for 2017. You cannot use your total income. We can only use the business set to continue (appraiser). Since you are 1099 employee as an appraiser, we will need the pay ledger from your employer for the most recent 12 months. This must come from your employer to me, it must be signed, and dated by your employer.” (they sent it to my MC this afternoon)
2) “Please provide the full bank statements showing the gifts funds leaving their accounts and bring transferred into your account. We cannot use the pages that were given for their accounts.” I was able to send a bank statement for 2 of the gifts, but one relative’s bank statement doesn’t close until Monday and she didn’t accept the activity statement from their account since it didn’t have their name,or address on it. It did have the last 4 digits of his account that the underwriter can cross reference with the gift documents. I ended up sending my MC his old statement that the underwriter can cross check the deposits/withdrawals from the old statement with the activity page I sent to prove that it is his account. Hopefully this will work.
3) “Please provide a correction the page 2 number 7 of the sales contract (see attached). The financing must be 100%. Please make sure all parties initial and date the change.” We have still not received the amended contract from the seller’s agent and my MC did not understand or not care about my prior explanation about me not actually able to qualify for the house at 100% financing.
We went under contract on October 20th with an anticipated closing on Nov 30th. I think it is safe to assume we will not make the closing on time. I am just worried about getting past credit access and hopefully the closing coordinator will be more helpful than my MC.
Congratulations! Happy to see you succeed
Thanks, yea that is what we’re doing. Seller’s agent said it shouldn’t be a problem. I just don’t want it to slow us down anymore
Good luck! Keep us posted
Sorry to hear that. I have never heard of an appraisal not being able to include comps after the contract date – generally the effective date of the appraisal is the day when the appraiser inspects the house (or empty lot in a new construction case) and they can use any sales up to the effective date. If what you are saying about NACA is true, then I think it is rare.
New construction upgrades are famous for being ‘overpriced’ and unfortunately you don’t get dollar for dollar back in the appraisal for most upgrades. Some builders even make you pay 50% of the upgrade price upfront in cash because they know the house won’t appraise once the upgrades are added to the loan amount.
Maybe you could use zillow or have your agent try to find better comps to support your price (add the comps to the grid in page 2 and do some calculation to see if the new comps justify your purchase price.)
If there is one good comp that is most similar to your house, sometimes the appraiser can give most weight to that house even if the other
comps don’t support the price (you can’t tell the appraiser how to do their job, but maybe suggest and see if they can do a new appraisal?)
Sometimes pending/under contract homes can support your price, but generally closed sales are more powerful (especially recently closed sales)
AS Southflorida mentioned, if the appraiser deducts seller concessions that will lower the price…maybe the can not deduct seller concessions.
If your market is increasing in price, you can suggest the appraiser make positive time adjustments to the comps that sold a few months prior to your contract date.
Lastly, negotiate with the builder. You should have the appraisal contingency selected in your purchase contract, so in this case you are not obligated to buy the house if your appraisal comes in low. Use that as leverage with the builder because as much as you want the house, your lender forbids you from buying it at that price and you are free to walk away (even though you really want the house still).
With all that said, it is possible you won’t get this house.
Thank you much for checking Tim, the ice has finally melted mostly here in South Carolina.
It is a bit of a bummer, but nothing that will stop me from forging ahead. Thanks again.
In your example, you say that we add back the Depreciation in the Schedule C (Line 13 on Schedule C).
I claim a large mileage deduction (around $18K) under Car and Truck Expenses (Line 9 on Schedule C).
Since I don’t list my expense under “depreciation”, I would like to know if the Car and Truck Expense also gets added back to my income or if it is strictly the Depreciation expense (Line 13) that gets added back. I have read that other lenders adds back around 23 cents per mile that I deduct, so I hope Naca does something similar.
Thanks for your help in trying to help me figure this out since it is one of the biggest factors in my affordability.
- This reply was modified 3 years, 3 months ago by lamber.
Thank you both for your responses.
I am sorry to hear that Homesweetboston- hopefully you can qualify for a higher amount after you file your taxes this year.
TTrumble- that is helpful. So if I understand you correctly, the Schedule C portion of the calculation is my net profit from Schedule C PLUS my mileage deduction added to it?
Thanks again, this forum has helped clear things up for me and give me hope that this is an achievable process for me.